KAMPALA — Uganda’s economy expanded by 8.5 percent in the second quarter of the 2025/26 financial year, up from 5.4 percent in the same period last year, according to preliminary estimates from the Uganda Bureau of Statistics (UBOS).
The growth was driven by increased aggregate demand and investments in ICT, buildings, machinery, and equipment.
Economic activity in February 2026 continued to improve, with higher output and increased employment boosting business conditions. Key economic indicators—the Purchasing Managers’ Index (PMI) and Business Tendency Index (BTI)—remained above the 50-point threshold, signaling expanding economic activity and positive business sentiment. The PMI was recorded at 54.2, while the BTI stood at 58.7.
Annual headline inflation declined to 2.9 percent in February from 3.2 percent in January, supported by slower increases in air transport and health service costs, as well as lower prices of seasonal food items such as vegetables, beans, and pumpkins.
In the financial sector, the Central Bank Rate (CBR) remained steady at 9.75 percent for the seventeenth consecutive month to support growth while stabilizing inflation. The Ugandan shilling depreciated slightly against the US dollar, trading at an average of Shs 3,568.23/USD. Private sector credit grew modestly by 0.3 percent in January.
Uganda also recorded a merchandise trade surplus of USD 147.26 million in January 2026, up from a deficit of USD 206.43 million the previous month. Export earnings surged 72.1 percent year-on-year, led by gold, coffee, industrial products, oil re-exports, beans, and electricity. Imports also increased, primarily due to machinery, mineral products, and vehicles.
Fiscal operations in February 2026 resulted in a deficit of Shs 1,221.53 billion, higher than the programmed target, due to infrastructure expenditure and partial payments for Uganda Airlines aircraft. Domestic revenue collection stood at 90.7 percent of the target.
Regional trends within the East African Community (EAC) were mixed, with Kenya and Tanzania recording lower inflation, while Rwanda saw an increase to 7.9 percent. Uganda’s trade with EAC partners yielded a USD 41.52 million surplus, reflecting higher exports and lower imports.