Uganda’s economy has shown notable resilience in the face of global economic challenges, according to a new report from the Ministry of Finance, Planning and Economic Development released Tuesday.
The report on the state of the economy highlights a 6.9% average growth rate over the first three quarters of the 2024/25 financial year, which ended on June 30. This growth was driven by increased government spending on poverty reduction programs such as the Parish Development Model, a rise in fixed capital formation, and a rebound in household consumption. The ministry also cited gains in investment and exports as key contributors.
The country’s GDP expanded from $53.9 billion in the previous year to $61.3 billion in 2024/25. Inflation remained well within the government’s 5% target, with annual headline inflation inching up slightly to 3.9% in June from 3.8% in May.
Export performance strengthened significantly, with earnings in the third quarter (January to March 2025) increasing by 39.1% to $2.6 billion. This was largely attributed to improved volumes and international prices for key commodities such as coffee and cocoa. Total exports for the year to March 2025 reached $11.8 billion, compared to $9.56 billion in the previous year.
On the import side, Uganda’s bill rose by 16.5% to $3.05 billion in the third quarter, driven primarily by higher non-oil private sector imports. The faster growth in exports helped reduce the trade deficit by 39.1%, narrowing it to $461 million.
Investor confidence also saw a marked improvement. Foreign direct investment (FDI) surged by 26.3% to $786 million in the January-March 2025 period, bringing total FDI for the 12 months to March 2025 to $3.48 billion, up from $2.99 billion the previous year.
Uganda’s balance of payments benefited from a declining current account deficit and an increase in international reserves, which reached $4.3 billion by June 2025, covering 3.8 months of imports.
The ministry projects economic growth of 7% for the 2025/26 fiscal year. With oil and gas production expected to begin, medium-term growth is forecast to rise into double digits.
The economy is anticipated to expand to $66.1 billion in 2025/26, raising GDP per capita to $1,324, up from $1,263 in 2024/25.
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