KAMPALA – Bank of Uganda (BoU) has maintained the Central Bank Rate (CBR) for the month of August at 10 percent as part of efforts by the Central Bank to sustain economic growth.
In a statement issued Governor Emmanuel Tumusiime-Mutebile on Thursday, while the economy in the current financial year is projected to grow at between 6 percent and 6.3 percent, there are potential risks arising externally from a depressed global economy.
“Economic growth in Financial Year 2019/20 is projected at 6 – 6.3 percent, supported by the accommodative monetary policy stance that has resulted in stronger growth in private sector credit, expansionary fiscal policy and multiplier effects of public infrastructure investments, ensuing strong domestic demand conditions and improved agricultural performance. Over a 2- 5 year horizon, growth is projected to remain robust, averaging 6.2 percent per annum,” Mr Mutebile’s reads in part.
“However, there are downside risks to this outlook. On the external scene, lower external demand due to a depressed global economy could weigh on Balance of Payments developments, particularly financial flows and services such as tourism and lead to volatility in the domestic foreign exchange market. On the domestic scene, weather-related constraints to agricultural production and delays in the implementation of public investment programmes could dampen economic activity,” he adds.
Nevertheless, the Governor said inflation remains subdued, with annual headline and core inflation averaging 3.1 percent and 4.3 percent, respectively in the quarter to July 2019.
“The Consumer Price Index (CPI) data for July 2019, released by Uganda Bureau of Statistics, indicates that inflation declined compared to June 2019,” he said.