August 2024
Performance of the Economy Report
Ministry of Finance, Planning and Economic Development
2024-09-18
List of Acronyms
| Acronym | Expansion | |
|---|---|---|
| B.Franc | Burundian Franc | |
| BOU | Bank of Uganda | |
| BTI | Business Tendency Index | |
| CBR | Central Bank Rate | |
| CIEA | Composite Index of Economic Activity | |
| DRC | Democratic Republic of Congo | |
| EAC | East African Community | |
| EFU | Energy, Fuels and Utilities | |
| FOB | Free on Board | |
| FX | Foreign Exchange | |
| FY | Financial Year | |
| GBP | British Pound Sterling | |
| ICBT | Informal Cross Border Trade | |
| KShs | Kenyan Shilling | |
| MDAs | Ministries, Departments and Agencies | |
| MOFPED | Ministry of Finance, Planning and Economic Development | |
| NGOs | Non-Governmental Organisations | |
| PAYE | Pay as You Earn | |
| PMI | Purchasing Managers’ Index | |
| PSC | Private Sector Credit | |
| R.Franc | Rwandan Franc | |
| T-Bills | Treasury Bills | |
| T-Bonds | Treasury Bonds | |
| TzShs | Tanzanian Shilling | |
| UBOS | Uganda Bureau of Statistics | |
| UShs / Shs | Ugandan Shilling | |
| US$ / USD | United States Dollar | |
| VAT | Value Added Tax | |
| YTM | Yield to Maturity |
Summary1
Real Sector
Both the Purchasing Managers’ Index (PMI) and the Business Tendency Index (BTI), which indicate perceptions about doing business, remained positive, signaling improved economic activity in August 2024. The PMI registered growth, rising to 56.3 in August 2024 from 53.7 in July 2024, driven by sustained expansions in new orders and greater client demand. Similarly, the BTI was recorded at 59.67 in August 2024, remaining above the 50-mark threshold, with increased optimism observed in all sectors.
Conversely, the CIEA (which is reported with a month’s lag) declined by 0.2% from 166.22 in June 2024 to 165.89 in July 2024.
Annual headline inflation slowed to 3.5% in August 2024, down from 4.0% in the previous month. This decline was primarily driven by a decrease in the general price level for food crops and related items, resulting in a deflation of 0.6% for the year ending August 2024.
Financial Sector
The Uganda Shilling, which had appreciated over the previous four months against the dollar, depreciated on average by 0.5% in August 2024. This depreciation was driven by stronger demand for the dollar from corporates and traders, which outweighed the inflows mainly from coffee exports and NGO’s.
In August 2024, the Central Bank Rate was lowered from 10.25% to 10.00%, attributed to the continued decline of inflation. This adjustment was further prompted by the diminishing effects of global shocks such as the war in Ukraine and COVID-19, as well as the relative stability of the Shilling against the US dollar.
The weighted average lending rates for Shilling-denominated credit increased slightly from 17.64% in June 2024 to 17.76% in July 2024. Similarly, foreign currency-denominated credit rates increased from 9.23% in June 2024 to 9.62% in July 2024.
In August 2024, Government raised a total of Shs. 2,599.8 billion through the issuance of treasury instruments, with Shs. 1,290.6 billion from T-Bills and Shs. 1,309.1 billion from T-Bonds.
Except for the 91-day tenor, whose annualized yield rate declined to 9.5% in August 2024 from 10.0% the previous month, yields on treasury bills slightly edged slightly upwards. The annualized yields on the 182-day and 364-day tenors rose to 13.1% and 13.7% in August 2024, up from 13.0% and 13.6% respectively, in the previous month.
In July 2024, the stock of outstanding Private Sector Credit increased by 1.5%, from Shs. 21,905.82 billion in June 2024 to Shs. 22,243.07 billion in July 2024. This growth was driven by a rise in both the Shilling and foreign currency denominated credit.
External Sector
Export earnings in July 2024 amounted to USD 785.03 million, a 9.2% increase from USD 718.60 million in June 2024. This growth was primarily driven by higher earnings from coffee, mineral products, cotton, tobacco and oil re-exports.
The value of merchandise imports increased by 9.1%, from USD 966.53 million in June to USD 1,054.36 million in July 2024. This was mainly attributed to higher volumes of formal private sector non-oil imports particularly; mineral products (excluding petroleum products), base metals & their products, machinery equipments, vehicles and accessories, as well as vegetable products, animal, beverages, fats & oils during the month.
Uganda’s merchandise trade deficit with the rest of the world increased from USD 247.93 million in June to USD 269.34 million in July 2024. The widening of the deficit was on account of an increase in the import bill, which was larger than the increase in export receipts during the month.
Fiscal Sector
Government operations during the month of August 2024 resulted in a net borrowing of Shs. 796.68 billion as compared to the program target of Shs 1,219.55 billion. This was on account of lower than projected net acquisition of non-financial assets which registered 36.7% performance.
Total revenue for the month of August 2024 amounted to Shs. 2,477.15 billion, against the programmed target of Shs. 2,499.92 billion registering a shortfall of Shs. 22.77 billion. This was mainly due to lower than planned grants and other revenue which registered short falls of Shs. 34.42 billion and Shs. 35.31 billion respectively.
In August 2024, expenses amounted to Shs. 3,005.79 billion against the program of Shs. 2,988.66 billion. compensation of employees, purchase of goods and services and social benefits were below program while grants and other expenses were above program. The performance under other expenses is attributed to many subventions receiving transfers at the end of the month.
Inflation picked up across the other EAC partner states. Annual inflation in Kenya, Tanzania, Rwanda and Burundi increased to 4.4% from 4.3%, 3.1% from 3.0%, 1.7% from 1.5% and 18.7% from 16.0% respectively, when compared with the previous month.
In August 2024, most of the currencies of the EAC Partner States registered marginal gains against the US Dollar, except for the Ugandan Shilling, which slightly depreciated by 0.5%. The Kenyan and Tanzanian Shillings appreciated by 1.3% and 0.4% respectively. Similarly, the Burundian and Rwandan Francs gained by 0.2% and 0.9% respectively.
In July 2024, Uganda traded at a surplus of USD 3.99 million with the rest of the EAC partner states, a decline from the surplus of USD 43.63 million registered the previous month. This was driven by the concurrent decline in exports earnings (10.9%) from the region and a rise of the imports (14.7%) from the region.
1 Real Sector Developments
1.1 Inflation
Annual headline inflation slowed down to 3.5% in August 2024 from 4.0% the previous month, mainly driven by a decrease in the general price level for food crops and related items resulting in a deflation of 0.6% for the year ending August 2024. Both annual core inflation and annual inflation for energy, fuel and utilities (EFU) reduced in August 2024 to 3.9% and 4.7% from 4.0% and 6.2% in July 2024, respectively.
Annual core inflation slowed down because of a reduction in annual services inflation (6.2% in August from 6.5% the previous month) mainly due to a decrease in the rate at which prices went up for transport services. Prices also reduced for maize and cassava flour, sugar, rice, and laundry bar soap in August 2024, compared to August 2023.
Annual food crops and related items inflation reversed to -0.6% in August 2024 compared to 2.0% registered the previous month. This was largely on account of continued price reductions for cassava, peas, beans, sweet bananas, carrots, pumpkin, green pepper and groundnuts compared to the same period last year. The lower food prices are a result of better agricultural harvests this year compared to the same period the previous year.
Annual Energy, Fuels and Utilities (EFU) Inflation decreased in August 2024 largely on account of reduction in prices for liquified propane gas (cooking gas), and electricity tariffs compared to the same month last year. The rate at which prices went up also slowed for charcoal, petrol and diesel for the year ending August 2024, compared to the year ending July 2024. This is partly due to the downward trend in international oil prices since July this year.
1.2 Economic Activity
Economic activity continued to increase following a pick-up in consumer demand, which further boosted confidence in business conditions as indicated by the Purchasing Managers’ Index(PMI) and the Business Tendency Index(BTI) in August 2024. Despite a slight decline in the Composite Index of Economic Activity(CIEA) to 165.89 in July 2024 from 166.22 the previous month, the PMI and BTI in August 2024 indicated growth in economic activity.
The Purchasing Manager’s Index (PMI) increased to 56.3 in August 2024, up from 53.7 the previous month. This growth indicates continued improvement of private sector performance. Higher consumer demand contributed to the continued expansion in both output and new orders. To increase capacity for the new orders, companies increased their staffing levels during the month. Despite higher input and staff costs during the month, selling prices declined in a bid to attract new customers by business owners. Some of the inputs that recorded higher prices include timber, paper products, cereals, cement and toiletries. However, the strong demand conditions enabled firms to increase their output and sales during the month. Growth in output and new sales was registered in all monitored sectors (Agriculture, Mining, Manufacturing, Construction, Wholesale, Retail and Services ).
1.2.1 Business Perceptions
Private sector sentiments about business conditions remained optimistic in August 2024 as shown by the Business Tendency Index that was above the 50-mark threshold. The BTI increased to 59.67 in August 2024 from 59.19 recorded the previous month, indicating increased confidence about the business conditions partly attributed to the increased consumer demand. Optimism was registered in all monitored sectors (Agriculture, Manufacturing, Mining, and Wholesale Trade).
2 Financial Sector Developments
2.1 Exchange Rate Movements
The Uganda Shilling, which had appreciated over the previous four months against the dollar, depreciated on average by 0.5% in August 2024. This depreciation was driven by stronger demand for the dollar from corporates and traders which outweighed the high inflows mainly from coffee exports and NGO’s. During the month, the Shilling registered an average mid-rate of Shs. 3,723.6/USD compared to Shs. 3,705.9/USD recorded in July 2024. Despite the loss during the month, the average mid-rate remained below the 12 month peak of Shs. 3,895.8/USD registered in March 2024. In addition, the local currency is anticipated to remain relatively stable in the near term as inflows from remittances and export receipts boost the supply of forex. The Shilling likewise depreciated against the British Pound Sterling and the Euro by 0.5% and 2.0%, respectively in August 2024.
2.2 Interest Rate Movements
On 7th August 2024, the Bank of Uganda reduced the Central Bank Rate (CBR) to 10.00% from 10.25%, as attributed to the continued decline in inflation below the medium-term policy target of 5%. This is due to the fading impacts of global shocks like the war in Ukraine and COVID-19, alongside the relative stability of the shilling against the US dollar.
2.2.1 Lending Rates4
The weighted average lending rates for Shilling-denominated credit
increased marginally from 17.64% in June 2024 to 17.76% in July
2024.
Similarly, foreign currency-denominated credit rates increased from
9.23% in June 2024 to 9.62% in July. These rates remained within close
range of their average lending rates, within the last year.
2.3 Government Securities
Government raised a total of Shs. 2,599.8 billion from issuance of Government securities in August 2024. Particularly, Shs. 1,290.6 billion was from issuance of T-Bills while Shs. 1,309.1 billion was from issuance of T-Bonds. Shs. 2,038.8 billion was used for refinancing maturing treasury instruments, while the remaining amount of Shs. 560.9 billion financed other items of the budget (domestic borrowing for budget).
| Total Issuances | Financing other items in the Government budget | Refinancing | |
|---|---|---|---|
| FY 2023/24 | 15,021.3 | 6,662.8 | 8,358.5 |
| July 2024 | 1,576.3 | 1,048.6 | 527.7 |
| August 2024 | 2,599.8 | 560.9 | 2,038.8 |
| FY 2024/25 to date | 4,176.1 | 1,609.5 | 2,566.6 |
2.4 Annualised Yields (Interest Rates) on Treasury Bills
Except for the 91-day tenor, whose annualized yield rate declined to 9.5% in August 2024 from 10.0% the previous month, yields on treasury bills slightly edged slightly upwards. The annualized yields on the 182-day and 364-day tenors increased to 13.1% and 13.7% in August 2024 from 13.0% and 13.6% respectively, in the previous month.
All auctions for treasury bills remained oversubscribed, with the average bid-to-cover ratio amounting to 1.96.
2.4.1 Yields on Treasury Bonds
The Government re-opened the 3-year, 10-year and 20-year tenor bonds on the primary securities market. Yields slightly edged downwards for all bonds in comparison to the previous issuance of similar securities. The yields for the 3-year, 10-year, and 20-year bonds declined to 15.3%, 15.8% and 16.5% from 15.5%, 16.0% and 17.0%, respectively. The decline in yields during the month follows the reduction in the CBR by 25 basis points in August 2024. Moreover, the sustained high demand for Government bonds as indicated by a bid to cover ratio of 2.2 partly contributed to the decline in yields.
2.5 Outstanding Private Sector Credit5
In July 2024, the stock of outstanding private sector credit increased by 1.5%, from Shs. 21,905.82 billion in June 2024 to Shs. 22,243.07 billion in July 2024. This growth was driven by a rise in both the Shilling and foreign currency denominated credit.
The Shilling-denominated credit increased from Shs. 15,615.85 billion in June 2024 to Shs. 15,824.78 billion in July 2024. The rise in Shilling-denominated credit is attributed to higher lending to the electricity and water sector, and the business services sector. Similarly, the foreign currency denominated credit increased from Shs. 6,289.98 billion in June 2024 to Shs. 6,418.29 billion in July 2024.
2.6 Credit Extensions6
In July 2024, a total of Shs. 1,443.5 billion was extended to the private sector by lending institutions, an increase from Shs. 1,360.9 billion the previous month. The approval rate for July was 70.1% in comparison to the 66.0% approval rate the previous month.
Personal and household loans accounted for the biggest share of loans extended to the private sector, accounting for 28.4% of the total credit approved. This was followed by the trade sector at 21.4%, and the agricultural sector at 13.7%.
3 External Sector Developments
3.1 Merchandise Trade Balance7
In July 2024, Uganda’s merchandise trade deficit with the rest of the world increased by 8.6% from USD 247.93 million in June to USD 269.34 million in July. The widening of the deficit was attributed to an increase in the import bill, which more than offset the increase in export receipts during the month.
Similarly, compared to the same month the previous year, the merchandise trade deficit widened by 6.0%, increasing from USD 254.05 million in July 2023, to USD 269.34 million in July 2024. This was driven by a simultaneous increase in the import bill and the export earnings over the period.
3.2 Merchandise Exports
Export earnings in July 2024 amounted to USD 785.03 million, a 9.2% increase from USD 718.60 million in June 2024. This growth was primarily driven by higher earnings from coffee, mineral products, cotton, tobacco and oil re-exports. Conversely, exports excluding coffee and mineral products declined by 8.3% from USD 307.35 million to USD 282.00 million, pointing to a decline for majority of merchandise exports in July 2024.
Coffee export earnings grew by 29.6%, rising from USD 162.36 million in June 2024 to USD 210.48 million in July 2024, mainly due to higher volumes. Coffee exports volumes in July grew by 23.1% when compared with June 2024, partly arising from the newly harvested robusta coffee from Greater Masaka and South Western regions reaching the market. International coffee prices grew by 5.3%, driven by the reduced supply of coffee from Vietnam and Brazil, because of drier than normal weather conditions that have affected their coffee crops.
Italy remained the largest market for Uganda’s coffee exports, accounting for 40.7% of the total coffee exports in July 2024. Other significant markets included Germany, Sudan, India and Netherlands accounting for 15.8%, 5.4%, 5.3% and 4.1% of total coffee exports, respectively.
| Product | Jul-2023 | Jun-2024 | Jul-2024 |
Jul-2024 vs Jul-2023 % Change |
Jul-2024 vs Jun-2024 % Change |
|---|---|---|---|---|---|
| Total Exports | 556.27 | 718.6 | 785.03 | 41.12 | 9.24 |
| Coffee | |||||
| Value Exported | 104.99 | 162.36 | 210.48 | 100.48 | 29.63 |
| Volume Exported (Millions of 60 Kg Bags) | 0.65 | 0.67 | 0.82 | 27.21 | 23.12 |
| Average Unit Value (US$ per Kg of Coffee) | 2.71 | 4.06 | 4.27 | 57.59 | 5.29 |
| Non-Coffee Formal Exports | 415.9 | 507.01 | 525.39 | 26.33 | 3.63 |
| of which: | |||||
| Mineral Products | 146.62 | 248.89 | 292.55 | 99.53 | 17.54 |
| Cotton | 0.84 | 0.32 | 0.62 | -26.11 | 95.24 |
| Tea | 7.42 | 4.78 | 4.2 | -43.43 | -12.19 |
| Tobacco | 4.92 | 3.28 | 3.31 | -32.59 | 1.01 |
| Fish & Its Prod. (Excl. Regional) | 10.28 | 10.85 | 10.01 | -2.68 | -7.8 |
| Simsim | 1.15 | 1.24 | 1.2 | 4.53 | -3.26 |
| Maize | 23.79 | 10.23 | 3.51 | -85.25 | -65.7 |
| Beans | 3.32 | 4.66 | 2.21 | -33.32 | -52.49 |
| Flowers | 6.25 | 6.69 | 6.54 | 4.67 | -2.28 |
| ICBT Exports | 35.38 | 49.22 | 49.15 | 38.93 | -0.14 |
In comparison to the same period last year, export earnings grew by 41.1% from USD 556.27 million in July 2023 to USD 785.03 million in July 2024, largely due to increased earnings from coffee and mineral products.
3.3 Destination of Exports8
The Middle East emerged as the biggest destination of Uganda’s exports, accounting for 30.3% of the total exports in July 2024. Within the Middle East, United Arab Emirates accounted for 97.5% of Uganda’s exports to the region.
Other notable destinations for Uganda’s exports were the EAC, European Union and Asia, which accounted for 26.5%, 21.8% and 14.6% of the total exports during the month respectively.
In comparison to the same month last year July 2023, EAC and Asia were the largest destinations of Uganda’s exports, accounting for 39.7% and 22.5% of exports respectively. They were followed by the European Union and the Middle East which accounted for 15.7% and 11.2% of the total exports, respectively.
3.4 Merchandise Imports9
The value of merchandise imports increased by 9.1%, from USD 966.53 million in June to USD 1,054.36 million in July 2024. This was mainly attributed to higher volumes of formal private sector non-oil imports particularly; mineral products (excluding petroleum products), base metals & their products, machinery equipments, vehicles and accessories, as well as vegetable products, animal, beverages, fats & oils during the month.
Similarly, when compared to the same month the previous year, the import bill grew by 30.1% from USD 810.32 million in July 2023 to USD 1,054.36 million in July 2024. This growth was majorly attributed to higher import volumes of mineral products (excluding petroleum products), base metals and their products, machinery equipments, vehicles and accessories, as well as vegetable products, animal, beverages, fats and oils.
3.5 Origin of Imports
Asia was the largest source of Uganda’s imports, accounting for 36.0% of the total imports in July 2024. Within Asia, the major sources were China and India accounting for 55.0% and 18.7% of the total imports from the region, respectively.
Other notable sources of Uganda’s imports included the Rest of Africa, EAC, the Middle East accounting for 24.4%, 19.2% and 13.4% of total imports, respectively. Within the EAC, Tanzania and Kenya were the leading sources of Uganda’s imports, accounting for 57.7% and 38.0% of imports to the region, respectively.
In comparison to July 2023, Asia was the largest source of Uganda’s imports, accounting for 36.9% of the total imports. This was followed by EAC, the Middle East and the Rest of Africa at 24.7%, 18.9% and 9.5% respectively.
3.6 Trade Balance by Region
During July 2024, Uganda traded at surpluses with the European Union, the Middle East and EAC amounting to USD 124.72 million, USD 96.94 million and USD 5.78 million, respectively.
On the other hand, trade deficits were recorded with Asia, Rest of Africa and Rest of Europe worth USD 264.63 million, USD 221.68 million and USD 0.47 million respectively.
| Region | Jul 2023 | Jun 2024 | Jul 2024 |
|---|---|---|---|
| European Union | 36.91 | 52.15 | 124.72 |
| Middle East | -90.94 | 14.13 | 96.94 |
| EAC | 21.02 | 45.26 | 5.78 |
| Rest of Europe | -3.79 | -2.14 | -0.47 |
| Rest of Africa | -29.67 | -137.76 | -221.68 |
| Asia | -173.37 | -205.4 | -264.63 |
| Other Countries | -14.22 | -14.16 | -10 |
4 Fiscal Developments10
Government operations during the month of August 2024 resulted in a net borrowing of Shs. 796.68 billion as compared to the program target of Shs. 1,219.55 billion. This was on account of lower than projected net acquisition of non-financial assets which registered 36.7% performance The table shows the summary of fiscal operations for August 2024.
| Shs Billion | Program | Outturn | Performance | Deviation |
|---|---|---|---|---|
| Revenues | 2,499.92 | 2,477.15 | 99.1% | -22.77 |
| Taxes | 2,148.04 | 2,195.01 | 102.2% | 46.96 |
| Social contributions | __ | __ | __ | 0 |
| Grants | 166.02 | 131.6 | 79.3% | -34.42 |
| Project support | 166.02 | 94.51 | 56.9% | -71.51 |
| Other revenue | 185.85 | 150.54 | 81.0% | -35.31 |
| Expense | 2,988.66 | 3,005.79 | 100.6% | 17.13 |
| Compensation of employees | 665.43 | 521.08 | 78.3% | -144.34 |
| Purchase of goods and services | 688.83 | 559.43 | 81.2% | -129.41 |
| Consumption of fixed capital | __ | __ | __ | 0 |
| Interest | 452.68 | 452.68 | 100.0% | 0 |
| o/w: domestic | 410.39 | 410.39 | 100.0% | 0 |
| o/w: foreign | 42.3 | 42.3 | 100.0% | 0 |
| Subsidies | __ | __ | __ | 0 |
| Grants | 864.66 | 1,132.11 | 130.9% | 267.45 |
| o/w: local governments | 508 | 505.19 | 99.4% | -2.82 |
| Social benefits | 40.84 | 31.99 | 78.3% | -8.85 |
| Other expense | 276.22 | 308.5 | 111.7% | 32.27 |
| Gross operating balance | -488.74 | -528.64 | 108.2% | -39.9 |
| Transactions in non-financial assets: | __ | __ | __ | 0 |
| Net Acquisition of Nonfinancial Assets | 730.81 | 268.05 | 36.7% | -462.76 |
| Net lending/borrowing | -1,219.55 | -796.68 | 65.3% | 422.87 |
4.1 Revenue Performance
Total revenue for the month of August 2024 amounted to Shs. 2,477.15 billion, against the programmed target of Shs. 2,499.92 billion registering a shortfall of Shs. 22.77 billion. This was mainly due to lower than planned grants and other revenue which registered short falls of Shs. 34.42 billion and Shs. 35.31 billion respectively.
Project grants registered a short fall of Shs. 71.51 billion which more than offset the surplus of Shs. 37.08 billion registered under budget support grants. The surplus under budget support grants was on account of disbursements from USAID to support regional referral hospitals.
Tax collections for the month amounted to Shs. 2,195.01 billion against the target of Shs. 2,148.04 billion posting a surplus of Shs 46.96 billion (a performance rate of 102.2%). This performance was attributed to surpluses in taxes on income & profits and trade taxes on goods & services which amounted to Shs. 61.44 billion and Shs. 21.87 billion respectively. On the other hand, taxes on international trade registered a short fall of Shs. 36.35 billion.
4.2 Expenses
In August 2024, expenses amounted to Shs. 3,005.79 billion against the program of Shs. 2,988.66 billion. compensation of employees, purchase of goods and services and social benefits were below program while grants and other expenses were above program. The performance under other expenses is attributed to many subventions receiving transfers at the end of the month. Compensation of employees during the month of August 2024 amounted to Shs. 521.08 billion against the plan of Shs. 665.43 billion. The purchase of goods and services was lower than the planned by Shs. 688.83 billion partly on account of delays in procurement processes by agencies.
However, grants amounted to Shs. 1,132.11 billion indicating 130.9% performance against the programmed target. This was on account of transfers to Extra budgetary institutions. A grant of Shs. 505.19 billion was released to local government of which Shs. 279.3 billion and Shs. 128.9 billion was for recurrent and development expenditure, respectively.
4.3 Net acquisition of non-financial assets
Shs. 268.05 billion was used to acquire non-financial assets during the month of August 2024, against a target of Shs. 730.81 billion. This was due to lower releases for development expenditure than originally appropriated for quarter one, and lower disbursements for externally financed projects.
5 East Africa Community Developments
5.1 EAC Inflation11
Inflation increased across the other EAC partner states, Kenya’s annual inflation rate increased to 4.4% in August 2024 from 4.3%, the prior month with the main upward pressure coming from prices of food & non-alcoholic beverage; housing & utilities; and transportation.
The annual inflation rate in Tanzania increased to 3.1% in August 2024, from 3% in the previous month, mainly driven by an increase in prices of miscellaneous goods & services; housing & utilities; transportation; education; and food & non-alcoholic beverages.
The annual inflation rate in Rwanda also increased to 1.7% in August 2024, up from 1.5% in July as prices continued to accelerate for housing & utilities; clothing & footwear; furnishings & household equipment and miscellaneous goods & services. Conversely, prices fell further for food & non-alcoholic beverages.
Inflation rate in Burundi increased to 18.7% in July from 16.0% in June of 2024.
5.2 EAC Exchange Rates12
In August 2024, most of the currencies of the EAC Partner States registered marginal gains against the US Dollar, except for the Ugandan Shilling, which slightly depreciated by 0.5%. The Kenyan and Tanzanian Shillings appreciated by 1.3% and 0.4% respectively. Similarly, the Burundian and Rwandan Francs gained by 0.2% and 0.9% respectively.
5.3 Trade Balance with EAC
In July 2024, Uganda traded at a surplus of USD 3.99 million with the rest of the EAC partner states, a decline from the surplus of USD 43.63 million which was registered the previous month. This was driven by the concurrent decline in exports earnings (10.9%) from the region and a rise of the imports (14.7%) from the region.
On a country specific level, Uganda traded at surpluses with DRC, South Sudan, Rwanda and Burundi worth USD 65.50 million, USD 44.00 million, USD 17.19 million and USD 5.44 million in July 2024 respectively. However, deficits were recorded with Tanzania and Kenya, amounting to USD 104.87 million and USD 21.48 million, respectively.
Comparison with the same month last year showed that exports to the EAC declined by 5.2% from USD 219.78 million in July 2023 to USD 208.40 million in July 2024 particularly due to a decline in our exports to South Sudan and Rwanda. Conversely, imports from the region increased by 1.3% from USD 200.03 million to USD 202.62 million over the same period.
Glossary
| Term | Description |
|---|---|
| Bid to cover ratio | This is an indicator for the demand of Government securities in a given auction. A ratio equal to 1 means that the demand for a particular security is equal to the amount offered by the government. A ratio less than 1 means the auction is under subscribed and a ratio greater than 1 means that the auction is over subscribed. |
| BTI | The Business Tendency Index measures the level of optimism that executives have about current and expected outlook for production, order levels, employment, prices and access to credit. The Index covers the major sectors of the economy, namely construction, manufacturing, wholesale trade, agriculture and other services. The Overall Business Tendency Index above 50 indicates an improving outlook and below 50 a deteriorating outlook. |
| CIEA | CIEA is constructed using seven variables, that is; private consumption estimated by VAT, private investment estimated by gross extension of private sector credit, government consumption estimated by its current expenditure, government investment estimated by its development expenditure, excise duty, exports and imports. Data comes with a lag of one month. |
| Core Inflation | This is a subcomponent of headline inflation that excludes items subject to volatility in prices. It excludes energy, fuels, utilities, food crops and related items. |
| Headline Inflation | This refers to the rate at which prices of general goods and services in an economy change over a period of time usually a year. |
| Non-Performing Loan | This is a sum of borrowed money upon which the debtor has not made scheduled payments for a period usually at least 90 days. |
| Tenor | This refers to the time-to-maturity of a financial instrument, for example, if a certain instrument matures after 91 days – it is called a 91-day tenor. |
| PMI | The PMI is a composite index, calculated as a weighted average of five individual sub-components; New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%), and Stocks of Purchases (10%). It gives an indication of business operating conditions in the Ugandan economy. The PMI above 50.0 signals an improvement in business conditions, while readings below 50.0 show a deterioration. The PMI is compiled on a monthly basis by Stanbic Bank Uganda. |
| Yield to Maturity (YTM) | Yield to maturity (YTM) is the total return anticipated on a treasury instrument if the instrument is held until it matures. |
Online Resources
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The entire history of data used for this and previous Performance of the Economy Reports - subject to data revisions - can be downloaded at mepd.finance.go.ug/apps/macro-data-portal.
An interactive display of leading economic indicators and a GDP nowcast is available at mepd.finance.go.ug/apps/macro-monitor.
Data on Private Sector Credit, CIEA and External Sector has a lag of one month.↩︎
Data on inflation for DRC, South Sudan and Somalia not readily available.↩︎
Data on Exchange Rates for DRC, South Sudan and Somalia not readily available.↩︎
Data comes with a month lag.↩︎
Data on Private Sector Credit has a lag of one month.↩︎
Data on credit extensions has a lag of one month.↩︎
Statistics on trade come with a lag of one month.↩︎
Other Countries include: Australia and Iceland.↩︎
Statistics on trade come with a lag of one month.↩︎
Fiscal data is preliminary.↩︎
Data for South Sudan, DRC and Somalia not readily available.↩︎
Data for South Sudan, Somalia and DRC not readily available.↩︎