Gov’t projects economy to grow at 3.8%

Government has said that with the easing of the Coronavirus lockdown and many businesses picking up, the country’s economy is expected to grow at 3.8%.

“This financial year, the economy is projected to grow at 3.8% above the outturn of 3.4% registered in the financial year 2020\21,” the Ministry of Finance Permanent Secretary, Ramathan Ggoobi told journalists on Wednesday.

Ggoobi noted that with the easing of the Coronavirus lockdown, there has been a continued recovery of the economy.

“The economy has continued on its recovery path following the partial reopening of the economy as sown by high frequency indicators of economic activity,” Ggoobi told journalists on Wednesday.

“The purchaser’s managers index improved to 52.5 in September from 50.2 in August on account of rising new orders and increased output by businesses as normal activity growth.”

He noted that data from business people show there is light at the end of the tunnel as many of them have gradually picked and receiving more orders than it was before.

According to the Ministry of Finance, inflation has also remained low and stable with headline and core inflation averaged at 2.3% and 3.1% respectively for the last 12 months.

In terms of numbers, Ggoobi said the economy has grown by 3.4% during the current 2020\21 financial compared to the 3.0% in the previous 2019\20 financial year whereas the in nominal terms, the size of the economy has also grown.

“Going forward, government will continue to provide support to the private sector through interventions like the small business recovery fund to ensure continued recovery.”

The Ministry of Finance Permanent Secretary said they will continue advocating and emphasizing for the openness of the economy to ensure full recovery.

“We are ensuring the economy keeps open by vaccinating people.  Government has started the purchase of vaccines with an aim of vaccinating a sizeable number of the population and this is the only gamechanger in as far as reopening the economy is concerned,” he said.

Bank of Uganda recently projected the country’s growth rate to be between 3.5 and 3.8 per cent for the 2021/22 financial year but slightly lower than what it had earlier projected between 3.5% and 4%.