Uganda’s Economy Grows Despite Shilling Pressure, Treasury Says

What the report says

Uganda’s Treasury says the economy is still expanding even as the shilling weakens and inflation risks rise. In a briefing tied to the release of second-quarter funds for the 2026/27 financial year, acting Permanent Secretary to the Treasury Patrick Ocailap said growth, foreign exchange reserves and remittances remain solid, while warning that pressures on prices, the exchange rate and the external sector call for tighter spending discipline. The report is published by Nile Post.

According to the article, Uganda’s real GDP grew by about 6.4% in 2025/26, slightly above the previous year, and early indicators such as the Purchasing Managers’ Index and Business Confidence Index remained in expansion territory. Treasury also projected 7.6% growth for 2026/27, supported by expected commercial oil production, higher exports and continued investment in priority sectors. However, the Bank of Uganda has a more cautious view, having recently lifted its policy rate and signaled slower growth ahead.

Nile Post reported that the shilling has fallen beyond Shs4,000 to the dollar and lost about 12% this year, adding pressure to imported fuel, machinery and other goods. At the same time, reserves increased to $6.7 billion by early October 2026, and remittances rose sharply over the year to June. The widening trade deficit and higher borrowing costs suggest the external outlook remains fragile, even as government says it will protect key programs while limiting non-essential spending.

The story matters because it shows a gap between official optimism and tightening monetary conditions, with inflation, exchange-rate weakness and the timing of oil production likely to shape Uganda’s near-term economic path.