2023-10-05 11:08:09
Uganda’s central bank maintained its main lending rate at 9.5% on Thursday, its deputy governor said, adding that the bank’s current monetary policy stance is expected to keep inflation close to its target at middle term.
The short-term outlook for the economy has remained broadly unchanged since the last rate decision, with growth driven by a recovery in the services sector, Bank of Uganda Deputy Governor Michael Atingi-Ego said. during a press conference.
“The current stance of monetary policy will contribute to maintaining inflation around its medium-term objective, supporting economic stability to encourage savings, investment, economic growth, competitiveness and social transformation of the “economy,” said Mr. Atingi-Ego.
In August, the bank cut the lending rate by 50 basis points following year-on-year inflation fell below its medium-term target of 5%.
Uganda’s economy has performed better than many of its African peers amid tightening global financial conditions, helped by favorable weather conditions and improved agricultural production.
The deputy governor said economic output in the second quarter of this year was 5.2 percent, higher than the previous quarter’s 0.4 percent, driven by strong activity in the service and industrial sectors.
“Economic growth is expected to remain strong in the coming months, driven by investment in the extractive industries, financed by foreign direct investment and increasing export earnings,” he said.
International oil companies TotalEnergies (France) and CNOOC (China) are making major investments in oil infrastructure and an export pipeline, as the country prepares to start pumping crude in 2025.
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