Economy slows in first three months of 2016

Real Gross Domestic Product fell 1.3% year-on-year in the third quarter of financial year 2015/2016, compared to a 2.1% growth in the second quarter, according to data from the Uganda Bureau of Statistics.

The slowing growth is mainly attributed to lower earnings from processed agricultural products, which fell 6% compared to a 2.2% growth in the second quarter. Value added in the services sector also declined 0.2%, compared to an increase of 3.1% in the previous quarter.

Export earnings from top agricultural products fell 14.8%, from $153.7 million in the previous quarter to $132 million. Even though coffee exports in the quarter increased compared to the second quarter – to 60,616 tons from 52,546 tons – they were bought at lower prices, earning $80.3 million from $81.5 in the last three months of 2015. Tea and tobacco exports however declined in volume in Q3 compared to Q2.

Real GDP expanded 1.7% in the third quarter of 2014/15 and 4.9% in the second quarter of the same year.

Uganda’s economy is projected to grow 5.5% in the 2016/17 financial year according to the budget estimates released last month. It expanded 4.6% in 2015/16, lower than the 5.0% target.

Uganda’s financial year runs from 1 July to 30 June.