Uganda’s economic activity continued to strengthen in the months leading to December 2025, supported by rising business confidence, favorable demand conditions, and robust export performance, according to the Ministry of Finance’s Performance of the Economy Report for December 2025.
“The economic fundamentals remain positive, with high-frequency indicators pointing to expansion across multiple sectors,” the report noted.
The Purchasing Managers’ Index (PMI), a key gauge of business activity, rose to 54.0 in December 2025 from 53.8 in November, remaining comfortably above the 50-point threshold that separates expansion from contraction. Similarly, the Composite Index of Economic Activity (CIEA) continued its upward trajectory, increasing to 181.48 in November 2025 from 180.41 in October, reflecting steady growth across the economy.
Optimism among business operators and investors has also strengthened. The Business Tendency Index (BTI) rose to 57.20 in December from 56.20 in November, with the Ministry of Finance noting that “favorable demand conditions, stable prices, and an enabling environment for business” have bolstered confidence.
Price Stability Maintained
Headline inflation remained steady at 3.1 percent in December 2025, reflecting sustained price stability. The report explained that “moderation in core inflation, particularly in services, offset increases in food crops and Energy, Fuel, and Utilities (EFU) inflation.” The Ugandan shilling also remained stable against the US dollar, trading at an average mid-rate of Shs 3,575.23/USD in December, compared to Shs 3,575.14/USD in November.
Trade Performance Supports Growth
Trade performance has been a key driver of Uganda’s economic momentum. The country’s merchandise trade deficit narrowed by 32.4 percent year-on-year, declining from USD 343.7 million (Shs 1.34 trillion) in November 2024 to USD 232.3 million (Shs 906.1 billion) in November 2025, primarily due to strong export growth.
Export earnings surged 70.4 percent annually, rising from USD 698.46 million (Shs 2.73 trillion) in November 2024 to USD 1,190.51 million (Shs 4.64 trillion) in November 2025. Coffee exports were a major contributor, increasing 70.8 percent to USD 185.99 million (Shs 725.8 billion), supported by peak production in central and eastern Uganda and favorable global coffee prices. Gold exports also played a significant role, although month-on-month variations reflected international price changes.
The Ministry of Finance highlighted that the combination of a narrowing trade deficit, steady inflation, and a stable currency signals resilience in Uganda’s economy and a more favorable environment for doing business.
“The sustained expansion in economic activity, coupled with strong export performance and stable macroeconomic conditions, underscores Uganda’s trajectory towards stronger and more inclusive growth,” the report noted.
