Uganda’s economy showed continued resilience and growth momentum in May and June 2025, with key high-frequency indicators pointing to sustained improvements in trade, private sector performance, and overall business sentiment. This progress aligns with preliminary estimates by the Uganda Bureau of Statistics (UBOS), which project a 6.3% GDP growth for the financial year 2024/25. According to the “Performance of the Economy – Monthly Report, June 2025†by the Ministry of Finance, Planning and Economic Development, the Composite Index of Economic Activity (CIEA) – a broad measure of economic performance – rose by 0.3% to 178.58 in May 2025, up from 178.13 in April. This improvement was primarily driven by an increase in both exports and imports, coupled with higher government spending during the period. The index maintained an upward trajectory throughout the financial year, underscoring consistent economic activity despite global uncertainties. Analysts note that the CIEA’s steady rise reflects Uganda’s growing resilience. “The upward movement in the index suggests that the domestic economy has gained significant momentum, benefiting from strong trade flows and fiscal spending,†said an economist at a Kampala-based consultancy. The private sector also recorded robust growth, as indicated by the Purchasing Managers’ Index (PMI), which registered 55.6 points in June 2025. This figure, well above the 50-mark that separates expansion from contraction, signals a continued improvement in business conditions. The expansion was largely driven by increased output and new orders, reflecting sustained consumer and business demand. However, the June figure represented a slight dip from 56.4 recorded in May, partly due to rising input costs. Firms reported higher staffing expenses and increased purchase costs for raw materials, which tempered overall performance. “Despite cost pressures, the private sector remains on a growth path, supported by resilient demand,†said a senior analyst at the Uganda Manufacturers Association, adding that a PMI above 55 indicates strong business confidence and continued economic recovery. Optimism within Uganda’s business community also remained high, as reflected by the Business Tendency Index (BTI). The index stood at 59.17 in June 2025, slightly lower than May’s 59.60 but still comfortably above the neutral 50-point threshold. The positive outlook was driven by expectations of improved financial conditions, favourable consumer demand, and business opportunities in the coming months. Sentiments were particularly strong in the manufacturing, construction, and wholesale trade sectors, with investors expressing optimism about the next quarter. “The high BTI readings underscore the private sector’s confidence in Uganda’s economic direction, particularly in sectors benefiting from government infrastructure projects and increasing consumer activity,†noted the report. In the foreign exchange market, the Ugandan Shilling appreciated by 1.3% against the US Dollar – trading at an average midrate of UGX 3,605.84 to the Dollar in June 2025, compared to UGX 3,653.4 in May. On an annual basis, the currency appreciated by 2.7% in FY2024/25, with the average midrate improving from UGX 3,778.61 per USD in FY2023/24 to UGX 3,676.21 per USD in FY2024/25. The relative strengthening of the Shilling, according to the Finance Ministry report, was driven by financial market reforms that reduced dollar demand, coupled with increased remittances, higher export earnings, foreign direct investments, and offshore portfolio inflows. With high-frequency indicators signalling solid economic activity, analysts are optimistic about Uganda’s growth prospects. The combination of resilient trade flows, expanding private sector output, and a strong local currency suggests that the country is well-positioned to sustain growth in the coming months, according to an analyst. However, experts caution that rising production costs and global economic uncertainties remain key risks. Addressing these challenges while ensuring reforms and encouraging investment would be crucial for sustaining Uganda’s positive growth trajectory.
