Uganda’s economy expands by 8.5 percent in the second quarter of FY 2025/26

Uganda Bureau of Statistics, preliminary estimates show that the economy expanded by 8.5 percent in the second quarter of FY 2025/26, up from 5.4 percent recorded in the same quarter of FY 2024/25.

This was largely due to increased aggregate demand and investments in ICT equipment, buildings, other structures, machinery & equipment.

Economic activity during the month of February 2026 continued to improve, characterized by improvements in business conditions, partly due to higher output & increased employment.

The high frequency indicators of economic activity and business sentiments, that is the Purchasing Managers’ Index (PMI) and the Business Tendency Index (BTI) remained above the 50-mark threshold, indicating improvements in economic activity and outlook respectively.

Annual headline inflation declined to 2.9 percent in February 2026 from 3.2 percent in January 2026. The decline in headline inflation was partly attributed to a slowdown in the rate at which the prices of services increased particularly air transport services for international flights, as well as health service costs including consultation fees, hospitalization charges and blood test fees among others.

The Central Bank Rate (CBR)remained unchanged at 9.75 percent in February 2026, marking the seventeenth consecutive month at this level. This rate was considered appropriate to support economic activity, while ensuring that inflation stabilizes at the policy target rate of 5 percent over the medium to long-term.

In January 2026, Uganda recorded a merchandise trade surplus of USD 147.26 million.

Uganda’s merchandise trade balance improved on a month-on-month basis from a deficit of USD206.43 million to a surplus of USD 147.26 million & year-on-year from a deficit worth USD215.28 million to a surplus of USD 147.26 million.

 Merchandise export receipts rose substantially on a year-on-year basis (72.1 percent), rising from USD 844.60 million in January 2025 to USD 1,453.53 million in January 2026 due to higher export earnings from gold, coffee, industrial products, oil re-exports, beans, and electricity, among others.