By David Rupiny
Uganda’s economic performance remains robust, and the outlook is optimistic for the financial year 2026/27 and the medium term, according to Dr Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury in the Ministry of Finance, Planning and Economic Development.
Ggoobi says growth is accelerating, inflation is under control, and the shilling remains strong and stable; exports have hit record numbers, and investor confidence is rising.
Here are the numbers:
Economic growth
The economy sustained steady momentum in the financial year 2025/26, growing at 6.4% in real terms, up from 6.3% the previous year, driven by stronger aggregate demand and continued implementation of government initiatives, notably the Parish Development Model (PDM) and the Uganda Development Bank, which expanded access to credit and seed capital.
Real GDP growth is projected to accelerate to 10.2% in the financial year 2026/27, supported by First Oil production, ongoing investment in ATMS (Agro-industrialisation, Tourism, Minerals, and Science, Technology and Innovation) and public infrastructure, stronger export growth, a stable macroeconomic environment, and improved public spending efficiency.
In nominal terms, GDP rose to Shs250.4 trillion (USD 69 billion) in the financial year 2025/26, up from Shs227.9 trillion in the financial year 2024/25, and is projected to reach Shs287.23 trillion (USD 75.5 billion) in the financial year 2026/27, raising GDP per capita to USD1,505.1, from USD1,420 in the financial year 2025/26.
Inflation
Annual headline inflation averaged 3.3% in FY2025/26 (down from 3.5% the prior year), reflecting effective monetary–fiscal policy coordination.
Inflation ticked up from 3.2% in May 2026 to 3.7% in June 2026, largely due to higher transport and energy costs from rising international oil prices amid Middle East tensions.
Overall, price pressures remain broadly contained within the 5.0% medium-term target.
State of the Shilling
The Ugandan shilling strengthened, appreciating by 1.9% against the US dollar between May and June 2026, supported by higher export earnings, increased remittances, greater offshore investment, and sound macroeconomic management.
As a result, the Ugandan Shilling remained the best-performing East African Community currency against the dollar in that period.
External Sector
Foreign exchange reserves strengthened to USD 6.01 billion at end-March 2026 (equivalent to 4.0 months of import cover), up from USD 3.555 billion at end-March 2025.
Total remittances from Ugandan abroad rose to USD 2.8 billion in the twelve months to March 2026 (from USD 1.9 billion a year earlier). Remittance inflows for Q3 of the financial year 2025/26 were USD 712.02 million, up 0.8% from USD 706.40 million in the same quarter of the financial year 2024/25.
Total export earnings rose to USD 18.04 billion in the twelve months to March 2026 (up from USD 5.93 billion in the twelve months to March 2022).
Key exports include gold, coffee, cocoa, fish, steel, sugar, and an expanding range of manufactured goods.
In Q3 of the financial year 2025/26, exports of goods and services grew 43.6%, from USD 3.4 billion to USD 4.9 billion.
Driven by these strong exports, remittances, and investment inflows, Uganda recorded a Balance of Payments surplus of USD 2.47 billion in the twelve months to March 2026 – the largest in 15 years.
Investor Confidence and Optimism
High-frequency indicators show rising investor confidence in Uganda, driven by political and economic stability and a strong average return on investment of 14%.
In the first three quarters of the financial year 2025/26, the Purchasing Manager’s Index and Business Tendency Index averaged 53.7 and 57.6 respectively – both above the 50-expansion threshold.
Meanwhile, the Composite Index of Economic Activity rose to an average of 181.55 in the first eight months of the financial year 2025/26 (from 169.61 a year earlier), reflecting broader activity gains.
***
