Country Report Uganda March 2011

Economic performance: The central bank is optimistic on economic growth

The governor of the Bank of Uganda, Emmanuel Tumusiime-Mutebile, was confidently upbeat about the prospects for the economy in a speech to local bankers in February, forecasting real GDP growth of 7% in the 2010/11 financial year (July-June). The governor's remarks followed the publication of a range of encouraging data from the bank at the end of 2010. Domestic revenue collections during the first four months (July-October) of the financial year were all significantly up compared with the same period the previous year-indirect taxes, value-added tax and excise duties all increased by around 13%, and direct taxes by nearly 42%. Figures for October 2010 show an encouraging increase in private-sector credit, with year-on-year growth of 32%, indicating rising consumption and investment. Most applications for credit were in the trade and commerce sector (22%), followed by building, construction and real estate (19%), personal loans (15%) and manufacturing (14%). In addition, the recently released index of manufacturing output (for October 2010) shows a strong upward trend since July 2010. Construction showed a vibrant performance, with annual growth of 27%, followed by metal products at 20%. The stability afforded by the re-election of the president, Yoweri Museveni, will add to growing business confidence and should ensure economic stability in the medium term.

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