Uganda projects 7% economic growth in FY2025/26

KAMPALA – Uganda’s economy is projected to grow by at least 7.0 percent in the Financial Year 2025/26, up from an estimated 6.3 percent growth in 2024/25, signaling recovery momentum and resilience in the face of domestic and global economic shocks.

Finance Minister Matia Kasaija, while delivering the national budget at Kololo Independence Grounds on June 12, attributed this robust performance to strategic public investment, targeted wealth creation programs, and macroeconomic stability engineered through prudent fiscal and monetary policies.

“The economy has strengthened its resilience to shocks,” Kasaija said. “Our deliberate onslaught on the subsistence economy has reduced the number of Ugandans working just for the stomach to three in every ten households”.

In nominal terms, Uganda’s economy is projected to expand to UGX 254.2 trillion (USD 66.1 billion) in FY2025/26, up from UGX 226.3 trillion (USD 61.3 billion) in FY2024/25. The corresponding GDP per capita is expected to rise to USD 1,324, from USD 1,263 in the previous year.
This trajectory places Uganda on course to becoming a middle-income country and aligns with the broader national ambition to grow the economy tenfold to USD 500 billion by 2040 under the Tenfold Economic Growth Strategy.
The inflation rate dropped to 3.4% in May 2025, down from 4.1% the previous year. This decline has been credited to improved food supply due to favourable weather, increased food production under the Parish Development Model, and lower global fuel prices.
The Uganda National Oil Company’s direct importation of petroleum products, bypassing middlemen, also helped stabilise fuel costs.

Currency and Investment Climate
Uganda’s shilling was ranked the most stable currency in Africa by the IMF’s International Financial Statistics unit, appreciating by 4% year-on-year in April 2025. This performance is backed by strong export earnings, rising tourism receipts, and a surge in foreign direct investment (FDI), which reached USD 3.48 billion by March 2025.
Private sector credit grew by 6.4%, reaching UGX 23.3 trillion, while interest rates fell to 17.7%, down from 18.1% in late 2024.

External Sector Gains
Uganda’s exports of goods and services increased significantly to USD 11.8 billion in the year to March 2025, up from USD 9.56 billion the previous year. Goods exports rose 26%, reaching USD 9.3 billion, aided by diversification into manufactured products like pharmaceuticals, steel, and dairy.
Remittances also grew to USD 1.4 billion, while tourism revenues increased by 13.1%, hitting USD 1.52 billion.
Fiscal Position and Revenue Mobilisation
Revenue collection is projected at UGX 31.9 trillion for FY2024/25 and will rise to UGX 37.2 trillion in FY2025/26. This will finance 60% of the national budget. The budget deficit is projected at 7.6% of GDP, and government plans to close the gap with borrowing and grants.
To improve domestic mobilisation, the Uganda Revenue Authority (URA) will ramp up tax reforms, digital enforcement (EFRIS, digital stamps, rental tax compliance), and anti-smuggling measures.
Conclusion
Uganda’s economic outlook for FY2025/26 is positive, underpinned by strategic investments, macroeconomic discipline, and a commitment to expand the monetised economy. As oil and gas production nears commencement, the government expects double-digit growth in the near term.
“The economic fundamentals—GDP growth, price and currency stability, jobs, exports, and FDI—are strong. We are on the path to irreversible transformation,” Kasaija concluded.