August 2025
Performance of the Economy Report
Ministry of Finance, Planning and Economic Development
2025-09-16
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 | |
| EAC | East African Community | |
| EFU | Energy, Fuels and Utilities | |
| 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 | |
| TShs | 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
In August 2025, economic activity and perceptions about doing business in Uganda continued to improve as shown by the high-frequency indicators of economic activity (the Purchasing Managers’ Index (PMI) and the Business Tendency Index (BTI)).
The PMI remained above its 50-mark threshold at 53.3 in August 2025 signaling continued improvement in Uganda’s private sector activity. The good performance was explained by higher output, new orders, job creation, and inventory buildup, supported by stronger demand across all sectors2.
Perceptions about doing business in Uganda remained positive as reflected by the Business Tendency Index (BTI) which stood at 57.20 in August 2025. Most sectors3 reported optimism about the business conditions partly due to increasing demand.
The Composite Index of Economic Activity (CIEA) remained marginally unchanged, at 180.24 in July 2025 signaling sustained improvement in economic activity. This was reinforced by the good performance of the PMI which also indicates favorable business conditions and an expansion in output.
Annual headline inflation remained unchanged at 3.8 percent in August 2025, the same rate recorded in July 2025. This was mainly on account of stability in Annual Core Inflation (which carries the largest weight in the consumer basket) that remained unchanged at 4.1 percent. Annual food crops inflation slowed down for the second month running, declining to 3.0 percent in August 2025 from 3.2 percent in July 2025. This was largely attributed to a reduction in the prices of food items such as Irish potatoes, passion fruits, mangoes, fresh beans and carrots.
Financial Sector
In August 2025, the Ugandan Shilling continued to gain against the US dollar recording an average mid-rate of Shs 3,563.9/USD down from 3,586.57/USD in July 2025. The continued strengthening of the Shilling was supported by higher export earnings from coffee and the weakening of the US dollar globally. Additionally, an investor friendly environment encouraged increased external inflows such as remittances and inflows from offshore investors into Government securities, boosting supply of forex.
Bank of Uganda maintained the Central Bank Rate (CBR) at 9.75 percent in August 2025. This decision was deemed appropriate to keep inflation within the medium-term target of 5 percent while supporting economic growth.
The weighted average lending rates for the Shilling-denominated credit increased to 19.65 percent in July 2025 from 19.07 percent in June 2025. This was partly due to market forces of demand and supply.
The stock of outstanding Private Sector Credit (PSC) declined by 0.5 percent from Shs 23,901.94 billion in June 2025 to Shs 23,785.74 billion in July 2025. This decline was primarily driven by reductions in both Shilling denominated credit (-0.06 percent) and foreign currency-denominated credit (-1.55 percent) from Shs 17,095.37 billion and Shs 6,806.57 in June 2025 to Shs 17,084.52 billion and Shs 6,701.23 billion in July 2025 respectively.
In August 2025, Shs 1,127.48 billion was raised from three auctions of Government securities on the domestic primary market. Of the total amount raised, Shs 717.34 billion was used for refinancing of maturing securities while Shs 410.14 billion was used to finance other items in the budget.
Yields (interest rates) on Treasury Bills registered mixed movements in August 2025. Yields on the 91-day edged downwards to 11.5% in August 2025 from 11.6% in July 2025 while yields on the 182-day edged upwards to 13.5% from 13.2%. Yields on the 364-day tenor bill remained unchanged at 15.3% during the month.
Yields on treasury bonds largely declined in comparison to the rates registered in previous issuances of similar securities. Yields for the 5-Year and 15-Year tenor bonds declined to 15.5% at 17.7% down from 16.8% and 17.8%, respectively. Yields for the 2-year tenor bond remained unchanged at 15.8% while the 25-year tenor bond registered a yield of 16.0% at its first issuance in the market.
External Sector
Year-on-year, Uganda’s trade deficit with the Rest of the World widened by USD 60.44 million (25.6 percent), rising from USD 236.39 million in July 2024 to USD 296.82 million in July 2025. This downturn was driven by an increase in the import bill by USD 495.87 million, which more than offset the USD 435.43 million increase in the export earnings in July 2025.
Uganda’s merchandise exports grew by 53.6 percent, from USD 812.69 million in July 2024 to USD 1,248.12 million registered in July 2025. This growth was mainly attributed to higher export earnings from coffee, gold, sugar, base metal & products, crude oil, fruits & vegetables, among others.
Uganda’s merchandise imports grew by 47.3 percent from USD 1,049.08 million in July 2024 to USD 1,544.94 million in July 2025. This increase was primarily attributed to higher formal private sector imports for both the oil and non-oil imports, coupled with a marginal increase in project related Government imports.
Fiscal Sector
Government operations in August 2025 resulted in a net borrowing (fiscal deficit) of Shs 980.06 billion which was higher than the programmed deficit of Shs 587.49 billion for the month. The higher than programmed deficit for the month was due to a combination of higher than planned expenses and lower than anticipated revenues during August 2025.
Total revenues received by Government amounted to Shs 2,587.94 billion against a target for the month of Shs 3,049.51 billion, implying a shortfall of Shs 461.57 billion. Both domestic revenues (tax and non-tax revenue) and grants were short of their respective targets. In spite of this shortfall, tax revenue collections have registered a growth of 7.6% from the levels registered in the same period of the previous financial year.
Total Government expenditure4 during the month of August 2025 amounted to Shs 3,149.07 billion which is 2.1% higher than the programmed Shs 3,083.87 billion for the month. This was partly on account of some expenses that were for July 2025 being effected in August 2025 following accomplishment of all the requisite budget processes at the beginning of the financial year that had been pending in July 2025.
In the month of August 2025, Government spent a total of Shs 418.93 billion on acquisition of non-financial assets including roads and bridges as well as other development projects. However, this amount was Shs 134.21 billion lower than the Shs 553.14 billion that had been projected to be spent during the month.
East African Community5
Annual headline inflation in August 2025 differed across the EAC Partner States. While Uganda’s inflation remained unchanged at 3.8 percent, inflation for Kenya and Tanzania edged upwards in August 2025 to 4.5 percent and 3.4 percent from 4.1 percent and 3.3 percent in July 2025, respectively. In contrast, Rwanda’s inflation reduced to 6.4 percent in August 2025, down from 7.2 percent the previous month. Similarly, Burundi’s annual headline inflation declined in July 2025 to 38.8 percent, down from 41.6 percent the previous month.
During August 2025, currencies within the East African Community (EAC) exhibited divergent trends against the United States Dollar. The Burundian Franc and the Rwandan Franc depreciated by 0.1 percent and 0.5 percent, respectively. The Kenyan Shilling remained unchanged at Shs 129.24 per USD. Conversely, the Tanzanian Shilling and the Ugandan Shilling appreciated by 4.1 percent and 0.6 percent, respectively, largely supported by forex from agricultural exports.
Uganda traded at a deficit of USD 105.02 million with the EAC Partner States, a decline in the trade deficit compared with the USD 206.32 million deficit registered the previous month. This fall in the deficit was driven by an increase in exports to the region, coupled with a fall in the import bill from the region.
Real Sector Developments
Inflation
Annual headline inflation remained unchanged at 3.8 percent in August 2025, the same rate recorded in July 2025. This was mainly on account of stability in Annual Core Inflation (which carries the largest weight in the consumer basket) that remained unchanged at 4.1 percent.
Annual core inflation remained unchanged at 4.1 percent over the same period. (see figure 1). This stability was on account of declines in prices of goods such as dried fish, local gin (waragi purified), and cement which offset the increase in prices for transport services, restaurant & accommodation services as well as insurance & financial services.
Items under other goods inflation registered further price declines as follows; dried fish (-16.7 percent in August from -12.8 percent in July), local gin/waragi (-2.8 percent in August from -1.2 percent in July), and cement (-6.5 percent in August from -4.8 percent in July 2025).
However, upward price pressures were also recorded for transport services, restaurant & accommodation services and insurance & financial services rising by 3.0 percent, 5.6 percent and 16.4 percent in August 2025 up from 2.5 percent, 5 percent and 15.7 percent in July 2025 respectively.
Annual inflation for food crops slowed down for the second month running, declining to 3.0 percent in August 2025 from 3.2 percent in July 2025. This was largely attributed to a reduction in the prices of food items such as Irish potatoes, passion fruits, mangoes, fresh beans and carrots by -12.4 percent, -6.4 percent, -6.1 percent, -12.9 percent and -7.9 percent in August 2025 compared to -4.6 percent ,0.9 percent, 14.5 percent, -2.2 percent and 4.0 percent in July 2025 respectively.
In addition, there was a slowdown in the rate at which prices increased for matooke (32.5 percent in August 2025 compared to 35.3 percent in July 2025) and fresh milk (1.4 percent in August 2025 compared to 3.6 percent in July 2025).
On the other hand, Annual Energy, Fuel and Utilities’ inflation increased in August 2025 to 1.1 percent from 0.0 percent in July 2025. This was mainly due to charcoal, whose price increased by 8.3 percent in August from 5.5 percent during the previous month. Despite the increase in EFU inflation, fuel pump prices in August 2025 remained lower compared to the same month in the previous year. On average, petrol was priced at Shs 5,099 per litre and diesel at Shs 4,733 per litre in August 2025, down from Shs 5,336 and Shs 4,882 per litre respectively in August 2024.
Economic Activity
Economic activity and perceptions about doing business continued to improve in August 2025 as shown by the high frequency indicators of economic activity.
The Composite Index of Economic Activity (CIEA)6 remained marginally unchanged, moving from 180.50 in June 2025 to 180.24 in July 2025, signaling sustained improvement in economic activity. This was reinforced by the good performance of the PMI which also indicates favorable business conditions and an expansion in output.
The Purchasing Managers’ Index (PMI)7 remained above 50 in August 2025, indicating sustained growth for Uganda’s private sector for the seventh consecutive month. The PMI was recorded at 53.3, indicating improved business conditions. The good performance was explained by higher output, new orders, job creation, and inventory buildup, supported by stronger demand across all sectors8. Firms continued to hire since February 2025, driven by increased workloads and temporary hiring across most sectors, with only manufacturing showing no change in employment. However, comparison with July shows that the PMI marginally declined from 53.6 to 53.3 in August, due to higher wages, utilities and raw materials. Businesses passed on these costs to customers through higher selling prices as observed in the other sectors, save for agriculture and construction.
Business Perceptions
The Business Tendency Index (BTI)9, which is an indicator of economic sentiments towards the economy remained positive at 57.20 in August 2025.
Overall, sentiments about doing business remained positive as reflected by the Business Tendency Index (BTI) which stood at 57.20 in August 2025. Most sectors reported optimism about the business conditions partly due to sustained strong demand. Of the 5 monitored sectors10 , only construction registered negative expectations stemming from low demand shown by the decline in sales. As a result, the headline BTI in August 2025 was slightly lower than 58.20 recorded the previous month.
Financial Sector Developments
Exchange Rate Movements
In August 2025, the Ugandan Shilling continued to gain against the US dollar recording an average mid-rate of Shs 3,563.9/USD down from 3,586.57/USD in July 2025. The continued strengthening of the Shilling was supported by higher export earnings and the weakening of the US dollar globally. Additionally, a stable macro-environment has encouraged increasing external inflows such as remittances and inflows from offshore investors into Government securities, boosting the supply of forex.
Similarly, the Shilling appreciated by 1.6 percent and 2.1 percent against the Euro and British Pound Sterling in August 2025, respectively. Since early 2025, the Shilling has weakened against the Euro and Pound, reflecting stronger European growth, tight monetary policies that supported their currencies, and rising import demand in Uganda. In August, however, this trend reversed as European growth slowed, while Uganda’s increased exports and a trade surplus with the European Union strengthened the Shilling.
Interest Rate Movements
The Bank of Uganda maintained the Central Bank Rate (CBR) at 9.75 percent in August 2025. This decision was deemed appropriate to keep inflation within the medium-term target of 5 percent while supporting economic growth.
Lending Rates11
Commercial banks’ Shilling denominated lending rates increased to a weighted average of 19.65 percent in July 2025 from 19.07 percent in June 2025. This was partly due to market forces of demand and supply. On the other hand, foreign currency denominated lending rates slightly reduced from a weighted average of 8.78 percent to 8.35 percent over the same period.
Government Securities
In August 2025, Shs 1,127.48 billion was raised from three auctions of Government securities on the domestic primary market. Of the total amount raised, Shs 717.34 billion was used for refinancing of maturing securities while Shs 410.14 billion was used to finance other items in the budget.
| Total Issuances | Financing other items in the Government budget | Refinancing | |
|---|---|---|---|
| FY 2023/24 | 15,021.3 | 6,662.8 | 8,358.5 |
| FY 2024/25 | 23,520.3 | 12,117 | 11,403.3 |
| August 2025 | 1,127.5 | 410.1 | 717.3 |
| FY 2025/26 to date | 3,818.1 | 1,879.8 | 1,938.3 |
Annualised Yields (Interest Rates) on Treasury Bills
Annualized yields (interest rates) on Treasury Bills registered mixed movements in August 2025. The yield on the 91-day edged downwards to 11.5% in August 2025 from 11.6% in July 2025 while the yield on the 182-day edged upwards to 13.5% from 13.2%. The yield on the 364-day tenor bill remained unchanged at 15.3% during the month.
All auctions for Treasury Bills remained oversubscribed, with the average bid to cover ratio of 1.69 during the month under review.
Yields on Treasury Bonds
In August 2025, yields for the bonds largely declined in comparison to the rates registered in previous issuances of similar securities. Yields for the 5-Year and 15-Year tenor bonds declined to 15.5% and 17.7% down from 16.8% and 17.8%, respectively. Yields for the 2-year tenor bond remained unchanged at 15.8% while the 25-year tenor bond registered a yield of 16.0% at its first issuance in the market.
On 6th August 2025, the Government issued its first 25-year bond to extend the maturity profile of domestic debt and mitigate refinancing risk. The bond attracted the highest number of bids in the auction, reflecting growing investor appetite for long-term savings instruments.
Outstanding Private Sector Credit12
The stock of outstanding private sector credit declined by 0.5 percent from Shs 23,901.94 billion in June 2025 to Shs 23,785.74 billion in July 2025. This decline was primarily driven by reductions in both Shilling denominated credit (-0.06 percent) and foreign currency-denominated credit (-1.55 percent) from Shs 17,095.37 billion and Shs 6,806.57 in June 2025 to Shs 17,084.52 billion and Shs 6,701.23 billion in July 2025 respectively.
The overall reduction in private sector credit was partly attributed to an increase in commercial lending rates. However, despite the dip recorded in July, the stock of outstanding private sector credit has generally remained on an upward trend since the start of the calendar year.
Credit Extensions13
The value of credit approved for disbursement in July 2025 amounted to Shs 1,844.74 billion against applications valued at Shs 3,031.31 billion, implying a 60.9 percent approval rate for the month.
Just like in the previous month, Personal Loans and Household loans accounted for the largest share of total credit approved for lending in July 2025, accounting for 28.2 percent of the total. This was followed by Building, Construction, and Real estate at 21.7 percent, Trade at 15.1 percent, Business, Community Social and Other Services at 12.4 percent, and Agriculture at 8.8 percent.
External Sector Developments
Merchandise Trade Balance14
Compared to July 2024, Uganda’s trade deficit with the Rest of the World widened by USD 60.44 million (25.6 percent), rising from USD 236.39 million to USD 296.82 million in July 2025. This downturn was driven by an increase in the import bill by USD 495.87 million, which more than offset the USD 435.43 million increase in the export earnings in July 2025.
Similarly, on a month-on-month basis, the trade deficit widened by USD 27.25 million (10.1 percent), driven by 117.86 million rise in the import bill, which outpaced the 90.61 million upturn in the export earnings during the month.
Merchandise Exports15
A year-on-year evaluation shows that Uganda’s merchandise exports grew by 53.6 percent, from USD 812.69 million in July 2024 to USD 1,248.12 million registered in July 2025. This growth was mainly attributed to higher export earnings from coffee, gold, sugar, base metal & products, crude oil (from simsim, palm oil and sunflower), fruits & vegetables, among others.
Uganda’s export earnings from coffee increased by USD 40.13 million (19.1 percent), increasing from USD 210.48 million in July 2024 to USD 250.60 million in July 2025. This increase in earnings was attributed to higher export volumes amidst declining global coffee prices. Uganda’s export volumes increased from 821,593 sixty-kilogram bags to 997,105 sixty-kilogram bags, on account of a good crop harvest in most coffee growing regions especially greater Masaka and Southwestern regions. This increase in quantity more than offset the decrease in coffee prices, which fell from USD 4.27/kg in July 2024 to USD 4.19/kg in July 2025 due to signs of increased supply from Vietnam and new harvest from Brazil.
Month-on-month, coffee export earnings declined in July 2025 by 13.5 percent, from USD 289.60 million to USD 250.60 million, primarily due to the global decline of coffee prices and lower coffee export volumes.
Italy maintained its position as the largest market for Uganda’s coffee, accounting for 31.1 percent of the total coffee exports in July 2025. Other significant markets included Sudan (12.5 percent), Germany (11.4 percent), Algeria (6.2 percent) and Belgium (4.2 percent).
On a monthly basis, export earnings in July 2025 amounted to USD 1,248.12 million, a 7.8 percent increase from USD 1,157.51 million recorded in June 2025. This growth was primarily driven by higher earnings from gold, sugar, oil re-exports, other pulses, crude oil and cement, among others. Similarly, exports excluding coffee and gold increased by 5.8 percent from USD 390.54 million to USD 413.33 million, signalling a marginal increase in other exports. Important to note however, is that coffee and gold account for over 66 percent of our exports, underscoring the need for greater diversification in our commodity exports.
| Product | Jul-2024 | Jun-2025 | Jul-2025 |
Jul-2025 vs Jul-2024 % Change |
Jul-2025 vs Jun-2025 % Change |
|---|---|---|---|---|---|
| Total Exports | 812.69 | 1,157.51 | 1,248.12 | 53.58 | 7.83 |
| Coffee | |||||
| Value Exported | 210.48 | 289.6 | 250.6 | 19.06 | -13.47 |
| Volume Exported (Millions of 60 Kg Bags) | 0.82 | 1.01 | 1 | 21.36 | -1.67 |
| Average Unit Value (US$ per Kg of Coffee) | 4.27 | 4.76 | 4.19 | -1.89 | -11.99 |
| Non-Coffee Formal Exports | 553.06 | 802.4 | 934.65 | 69 | 16.48 |
| of which: | |||||
| Mineral Products | 292.06 | 477.37 | 584.18 | 100.02 | 22.37 |
| Cocoa Beans | 28.18 | 39.29 | 27.34 | -2.98 | -30.42 |
| Cotton | 0.62 | 1.13 | 1.08 | 75.07 | -3.68 |
| Tea | 4.12 | 5.45 | 5.13 | 24.57 | -5.81 |
| Tobacco | 3.31 | 1.56 | 1.14 | -65.56 | -26.88 |
| Fish & Its Prod. (Excl. Regional) | 10.27 | 12.73 | 13.78 | 34.15 | 8.25 |
| Simsim | 1.2 | 2.24 | 1.34 | 11.51 | -40.18 |
| Maize | 7.63 | 5.69 | 6.25 | -18.1 | 9.81 |
| Beans | 4.51 | 6.35 | 4.31 | -4.46 | -32.12 |
| Flowers | 6.54 | 6.89 | 6.35 | -2.95 | -7.8 |
| Oil Re-Exports | 12.13 | 12.06 | 13.6 | 12.12 | 12.72 |
| Base Metals & Products | 17.65 | 25.02 | 25.26 | 43.13 | 0.97 |
| ICBT Exports | 49.15 | 65.51 | 62.87 | 27.91 | -4.03 |
Destination of Exports16
In July 2025, the Middle East remained Uganda’s largest export destination, accounting for 40.5 percent of Uganda’s exports. At a country-specific level within the Middle East, the United Arab Emirates dominated, receiving 98.6 percent of Uganda’s exports to the region.
The East African Community (EAC) was the second largest destination, accounting for 25.0 percent of total exports, followed by the European Union (14.7 percent) and Asia (11.3 percent). Within the EAC, the Democratic Republic of Congo maintained its position as the largest importer of Uganda’s merchandise, taking up 30.9 percent of the total exports. This was followed by Kenya at 26.6 percent and Rwanda at 15.5 percent.
Merchandise Imports17
In comparison to the same month the previous year, Uganda’s merchandise imports grew by 47.3 percent from USD 1,049.08 million in July 2024 to USD 1,544.94 million in July 2025. This increase was primarily attributed to higher formal private sector imports for both the oil and non-oil imports, coupled with a marginal increase in project related Government imports. Key private sector import categories that recorded growth include mineral products (excluding petroleum products), machinery equipment, vehicles & accessories, petroleum products, prepared foodstuff, beverages & tobacco, among others.
Similarly, a month to month analysis shows that the import bill increased by 8.3 percent, from USD 1,427.09 million in June 2025 to USD 1,544.94 million in July 2025. This increase was mainly driven by the rise in non-oil formal private sector imports, particularly mineral products, machinery equipment, vehicles & accessories, chemical & related products vegetable products, as well as plastics, rubber & related products. This increase in non-oil formal private sector imports, more than offset the decline of Government imports and oil related formal private sector imports.
Origin of Imports
In July 2025, Asia emerged as the largest source of imports for Uganda, accounting for 35.6 percent of the total import bill. Within Asia, China, India and Japan were the dominant sources of our imports from the region, accounting for 55.5 percent, 22.0 percent and 9.0 percent of this import bill, respectively.
Other notable sources of Uganda’s imports were the EAC, the Rest of Africa and the European Union, which contributed 27.0 percent, 20.3 percent and 7.2 percent of total imports, respectively. Within EAC, Tanzania and Kenya were the primary sources of Uganda’s imports, collectively accounting for 98.1 percent of the imports from the region.
Trade Balance by Region
During the month of July 2025, Uganda registered trade surpluses with the Middle East and the European Union amounting to USD 415.45 million and USD 70.90 million respectively. Contrarily, trade deficits were recorded with the Asia (USD 408.90 million), Rest of Africa (USD 233.44 million), the EAC (USD 105.02 million) and Rest of Europe (USD 15.39 million).
| Region | Jul 2024 | Jun 2025 | Jul 2025 |
|---|---|---|---|
| European Union | 129.73 | 169.94 | 70.9 |
| Rest of Europe | 0.26 | -11.84 | -15.39 |
| Middle East | 93.75 | 236.1 | 415.45 |
| Asia | -254.47 | -282.97 | -408.9 |
| EAC | 22.66 | -206.32 | -105.02 |
| Rest of Africa | -219.99 | -167.77 | -233.44 |
| Other Countries | -8.32 | -6.71 | -20.42 |
Fiscal Developments18
Preliminary data shows that Government fiscal operations in August 2025 resulted in a net borrowing (fiscal deficit) of Shs 980.06 billion which was higher than the programmed deficit of Shs 587.49 billion for the month. The higher than programmed deficit for the month was due to a combination of higher than planned expenses and lower than anticipated revenues during August 2025.
Table 4 provides a summary of the preliminary Government fiscal operations in August 2025.
| Shs Billion | Program | Outturn | Performance | Deviation |
|---|---|---|---|---|
| Revenues | 3,049.51 | 2,593.43 | 85.0% | -456.08 |
| Taxes | 2,479.28 | 2,388.13 | 96.3% | -91.15 |
| Grants | 313.28 | 38.29 | 12.2% | -274.99 |
| Project support | 313.28 | 38.29 | 12.2% | -274.99 |
| Other revenue (Non-tax revenue) | 256.95 | 167.01 | 65.0% | -89.94 |
| Expense | 3,083.87 | 3,149.07 | 102.1% | 65.2 |
| Compensation of employees | 412.77 | 421.02 | 102.0% | 8.25 |
| Wages And Salaries | 289.28 | 294.3 | 101.7% | 5.02 |
| Allowances | 68.9 | 70.08 | 101.7% | 1.18 |
| Employers’ social contributions | 54.59 | 56.64 | 103.8% | 2.05 |
| Purchase of goods and services | 589.41 | 643.43 | 109.2% | 54.02 |
| Interest | 737.28 | 737.28 | 100.0% | 0 |
| o/w: domestic | 629.12 | 629.12 | 100.0% | 0 |
| o/w: foreign | 108.17 | 108.17 | 100.0% | 0 |
| Grants | 810.73 | 835.63 | 103.1% | 24.9 |
| Social benefits | 115.39 | 121.47 | 105.3% | 6.08 |
| Other expense | 418.27 | 390.24 | 93.3% | -28.03 |
| Gross operating balance | -34.35 | -555.63 | 1 617.6% | -521.28 |
| Net Acquisition of Nonfinancial Assets | 553.14 | 418.93 | 75.7% | -134.21 |
| Net lending/borrowing (surplus/deficit) | -587.49 | -974.56 | __ | __ |
Revenues and Grants
Total revenues received by Government amounted to Shs 2,587.94 billion against a target for the month of Shs 3,049.51 billion, implying a shortfall of Shs 461.57 billion. Both domestic revenues (tax and non-tax revenue) and grants were short of their respective targets.
Taxes & Other revenue collections
During August 2025, tax revenue collections amounted to Shs 2,388.13 billion against a target of Shs 2,479.28 billion. This implied a shortfall of Shs 91.14 billion for the month. Cumulatively since the start of the financial year 2025/26, tax collections have amounted to Shs 4,626.71 billion against a target of Shs 4,733.41 billion resulting in a cumulative shortfall of Shs 106.71 billion. In spite of this shortfall, tax revenue collections have registered a growth of 7.6% from the levels registered in the same period of the previous financial year. The observed shortfalls in tax revenue so far this financial year are mainly under indirect domestic taxes as well as taxes on international trade transactions. Value Added Tax (VAT), excise duty, petroleum duty, and excise duty on imports underperformed in the first two months of the financial year. This shortfall was partly due to higher input costs among some of the top VAT taxpayers and lower than projected imports, including petroleum products, which reduced customs collections. In addition, non-tax revenue amounted to Shs 167.01 billion in August 2025, falling short of the monthly target of Shs 256.95 billion by Shs 89.94 billion.
Grants
Government projected to receive an equivalent of Shs 313.28 billion from development partners to support development projects in August 2025. However, information about disbursements comes with a lag. Whereas the preliminary information indicates that only Shs 38.29 billion was received in August 2025, this amount will improve as more information comes in.
Expenses
Total Government expenses during the month of August 2025 amounted to Shs 3,149.07 billion which is 2.1% higher than the programmed Shs 3,083.87 billion for the month. This was partly on account of some expenses that were for July 2025 being effected in August 2025 following accomplishment of all the requisite budget processes at the beginning of the financial year that had been pending in July 2025.
All the various categories of expenses were slightly higher than what had been initially programmed for August 2025. Compensation of employees was Shs 421.02 billion against a plan of Shs 412.77 billion, purchase of goods and services amounted to Shs 643.43 billion against a programme of Shs 589.41 billion, and grants to the Local Governments, tertiary institutions and regional hospitals totalled Shs 835.63 billion against a plan of Shs 810.73 billion.
Net acquisition of non-financial assets
During the month of August 2025, Government spent a total of Shs 418.93 billion on acquisition of non-financial assets including roads and bridges as well as other development projects. However, this amount was Shs 134.21 billion lower than the Shs 553.14 billion that had been projected to be spent during the month.
East Africa Community Developments
EAC Inflation19
Annual headline inflation in August 2025 differed across the EAC Partner States. While Uganda’s inflation remained unchanged at 3.8 percent, inflation for Kenya and Tanzania edged upwards in August 2025 to 4.5 percent and 3.4 percent from 4.1 percent and 3.3 percent in July 2025. This increase was majorly attributed to higher prices of items under; Food and Non-Alcoholic Beverages; Transport, and Housing, Water, Electricity, Gas and other fuels.
On the other hand, Rwanda’s inflation reduced to 6.4 percent in August 2025, down from 7.2 percent the previous month. This was driven by a slowdown in the price of food and non-alcoholic beverages particularly bread, cereals, milk, cheese and eggs among others.
Burundi’s annual headline inflation declined in July 2025 to 38.8 percent, down from 41.6 percent the previous month. This was largely due to a slowdown in food price pressures particularly for items such as bread and cereals, fish, meat, fruits, and dairy products.
EAC Exchange Rates20
During August 2025, currencies within the East African Community (EAC) exhibited divergent trends against the United States Dollar. The Burundian Franc and the Rwandan Franc depreciated by 0.1 percent and 0.5 percent, respectively, while the Kenyan Shilling remained unchanged at Shs. 129.24 per USD. Conversely, the Tanzanian Shilling and the Ugandan Shilling appreciated by 4.1 percent and 0.6 percent, respectively, largely supported by forex from agricultural exports.
Trade Balance with EAC21
During the month of July 2025, Uganda traded at a deficit of USD 105.02 million with the EAC Partner States, a decline in the trade deficit compared with the USD 206.32 million deficit registered the previous month. This fall in the deficit was driven by an increase in exports to the region, coupled with a fall in the import bill from the region. Imports from the region fell by 15.9 percent from USD 496.45 million in June 2025 to USD 417.38 million in July 2025. Conversely, exports to the region increased by 7.7 percent from USD 290.13 million to USD 312.36 million over the same period.
At a country specific level, Uganda traded at a surplus with the Democratic Republic of Congo, Rwanda, South Sudan and Burundi with USD 93.42 million, USD 51.35 million, USD 45.88 million and USD 8.48 million respectively. However, deficits were recorded with Tanzania and Kenya worth USD 253.68 million and 50.46 million respectively.
Year on year, Uganda’s trade balance with the region declined from a surplus of USD 22.66 million in July 2024 to a deficit of USD 105.02 million in July 2025. This deterioration was driven by a 107.1 percent increase in the import bill (from USD 201.57 million to USD 417.38 million), which surpassed the 39.3 percent increase in export receipts from (USD 224.23 million to USD 312.36 million).
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. |
| Month on Month | Is a way to measure the percentage change in a value from one month to the next. |
| Year on Year | Is a method of comparing data for a specific period (e.g., a month or quarter) with the same period in the previous year. |
Online Resources
Visit us online at mepd.finance.go.ug.
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.↩︎
Sectors: Agriculture, Mining, Manufacturing, Construction, Wholesale & Retail and Services.↩︎
Sectors: Construction, Manufacturing, Wholesale trade, Agriculture, Services↩︎
Total expenditure comprises of expenses (such as compensation of employees, purchase of goods and services, and interest payments) and the acquisition of non-financial assets (capital spending on infrastructure, equipment, and other physical assets).↩︎
Some Data for South Sudan, Somalia, Burundi and Democratic Republic of Congo not readily available.↩︎
Data on CIEA has a lag of one month.↩︎
The PMI above 50.0 signals an improvement in business conditions, while readings below 50.0 show a deterioration.↩︎
Sectors: Agriculture, Mining, Manufacturing, Construction, Wholesale, Retail, Services.↩︎
The Overall BTI above 50 indicates a positive outlook and below 50 indicates a negative outlook.↩︎
These sectors include Construction, Manufacturing, Wholesale trade, Agriculture, Services↩︎
Data comes with a month lag.↩︎
Data on Private Sector Credit has a lag of one month.↩︎
Data on private sector credit has a lag of one month.↩︎
Statistics on trade come with a lag of one month.↩︎
Other Countries include: Australia and Iceland.↩︎
Others include: Australia and Iceland.↩︎
Statistics on trade come with a lag of one month.↩︎
Fiscal data is preliminary.↩︎
Data for South Sudan, Burundi, Somalia and Democratic Republic of Congo not readily available.↩︎
Recent data for Democratic Republic of Congo, South Sudan and Somalia not readily available.↩︎
Data on trade with the EAC has a one-month lag.↩︎