Uganda

The economy was on its knees even before the direct Covid-19 hit – real GDP growth plunged to 1.8% y-o-y in Q1 2020 from 6.7% y-o-y in Q4 2019. Due to the sharp decline in consumer spending and sudden economic stops caused by the virus, we now expect the economy to contract by 1.7% this year. This, however, is against our earlier forecast of a 3.1% contraction on account of emerging evidence of a faster near-term growth rebound as lockdown restrictions are gradually relaxed in Uganda and globally. Uganda's exports are expected to decline this year due to a reduction in global demand; though at the same time, imports should fall notably due to a reduction in global oil prices and subdued industrial activity, while fiscal efforts to fight Covid-19 should widen the fiscal deficit. With FDI inflows expected to decline substantially in 2020, Uganda will need to turn to external debt to fund its twin deficits. Meanwhile, the political environment has become increasingly unstable as the 2021 presidential elections draw closer. President Yoweri Museveni has cracked down on the opposition in the past and, thanks to the pandemic, he is able to continue his suppression of dissent under the pretext of addressing a global health crisis. (Source: Uganda Quarterly Update, published July 2020)

Macroeconomic Data

(2019)