{
  "title": "Public Information Notice: IMF Executive Board Concludes 2008 Article IV Consultation with Uganda",
  "publication": "IMF News, February 17, 2009",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn0923",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn0923",
  "overlayPath": "/en/news/articles/2015/09/28/04/53/pn0923/index.md",
  "summary": "Each Public Information Notice contains a background section, a table of selected economic indicators, and an Executive Board assessment.",
  "publishDate": "2009-02-17",
  "sections": [
    {
      "heading": "Background",
      "content": "- Uganda's economy has been among the fastest-growing in Sub-Saharan Africa, building on two decades of sound policies that delivered high growth, low inflation, and steady poverty reduction.\n- In 2008 Uganda was affected by two major shocks:\n  - Global surge in food and fuel prices, causing domestic inflation to rise above 15 percent.\n  - Global economic downturn, likely reducing demand for Uganda's exports and the availability of financing for critical investment projects.\n- Near-term outlook and policy responses:\n  - Economic growth in 2008/09 is expected to decline from recent high levels but remain robust at 7-7½ percent.\n  - Core inflation is estimated to fall to 7 percent by June 2009, aided by lower international food and fuel prices.\n  - Monetary policy is expected to support disinflation, with base money growing at a substantially lower pace than in 2007/08.\n  - Fiscal deficit projected to widen somewhat in 2008/09 as development expenditures are scaled up; recourse to domestic financing expected to remain limited to less than 1 percent of GDP.\n  - International reserves expected to drop moderately as demand for exports falls and other inflows (remittances, FDI) are scaled back.\n  - Financial system relatively insulated from the global financial crisis, but slowdown could expose weaknesses in banks' credit portfolios."
    },
    {
      "heading": "Executive Board Assessment",
      "content": "- Directors commended authorities for sound macroeconomic management that underpinned the strong performance and poverty reduction.\n- Immediate challenges arise from the global downturn and reduced external financing; economy judged well-positioned due to low public debt, comfortable international reserves, and a relatively sound banking sector.\n- Medium-term constraints highlighted:\n  - Infrastructure bottlenecks and dependence on subsistence agriculture impede growth.\n  - Preparation of a new National Development Plan, including scaling-up government investment in infrastructure, was welcomed.\n  - Need for careful evaluation of investment projects, including impacts on debt sustainability and international reserves.\n- Fiscal policy guidance:\n  - Recognized strong fiscal performance in 2007/08.\n  - Fiscal policy should maintain modest stimulus underlying the 2008/09 budget.\n  - In case of revenue shortfall in 2008/09, authorities encouraged to avoid precipitous cuts in current expenditures, strengthen expenditure management, and prevent further accumulation of domestic arrears.\n  - Supported authorities' medium-term target to increase tax revenues by ½ percent of GDP annually and welcomed consideration of a fiscal rule to underpin consolidation and prudent use of oil revenues.\n- Monetary and exchange rate policy guidance:\n  - Monetary policy should sustain confidence in the currency while supporting disinflation.\n  - Authorities encouraged to use falling international food and fuel prices to bring inflation back toward the medium-term objective.\n  - Preconditions should be ensured before introducing a formal inflation-targeting framework.\n  - Flexible exchange rate regime seen as effective; staff assessment that the real effective exchange rate is broadly in line with fundamentals.\n  - Scope noted for targeted foreign exchange intervention to avoid excessive volatility.\n- Financial sector guidance:\n  - Banking sector overall sound, banks well-capitalized and relatively insulated from global crisis.\n  - Concerns about rapid expansion of bank lending and significant share of foreign-exchange loans in banks' portfolios.\n  - Need to further strengthen prudential supervision and collaborate closely with home supervisors of banks operating in Uganda."
    },
    {
      "heading": "Key Economic Indicators and Projections (selected figures)",
      "content": "- Real GDP (percent change):\n  - 2006/07: 8.6\n  - 2007/08: 9.8\n  - 2008/09 Est.: 9.5\n  - 2009/10 Proj.: 7.4\n  - 2010/11 Proj.: 7.3\n  - 2011/12 Proj.: 7.1\n  - 2012/13 Proj.: 8.0\n- Headline inflation (end of period):\n  - 2006/07: 4.4\n  - 2007/08: 10.2\n  - 2008/09 Est.: 12.5\n  - 2009/10 Proj.: 7.7\n  - 2010/11 Proj.: 5.0\n- Core inflation (end of period):\n  - 2008/09 Est.: 11.3 (note: table shows core inflation 11.3 in 2006/07 and 12.1 in 2007/08; 7.0 shown for 2009/10)\n  - 2006/07: 11.3\n  - 2007/08: 12.1\n  - 2009/10 Proj.: 7.0\n- Terms of trade (deterioration -):\n  - 2006/07: 5.5\n  - 2008/09 Est.: -2.5\n  - 2010/11 Proj.: -3.6\n  - 2011/12 Proj.: -2.6\n- Real effective exchange rate (depreciation -):\n  - 2006/07: 2.7\n- Broad money (M2, percent change):\n  - 2006/07: 16.7\n  - 2007/08: 20.3\n  - 2008/09 Est.: 30.3\n  - 2009/10 Proj.: 18.0\n  - 2010/11 Proj.: 17.6\n  - 2011/12 Proj.: 19.0\n- Domestic credit (percent change):\n  - 2006/07: -6.4\n  - 2007/08: 7.2\n  - 2008/09 Est.: 22.0\n  - 2009/10 Proj.: 16.2\n  - 2010/11 Proj.: 14.9\n  - 2011/12 Proj.: 15.1\n  - 2012/13 Proj.: 16.0\n  - 2013 Proj.: 16.3\n- Credit to the central government (percent of M3 at start of the period):\n  - 2006/07: -17.2\n  - 2007/08: -7.6\n  - 2008/09 Est.: -4.3\n  - 2009/10 Proj.: 1.4\n  - 2010/11 Proj.: 2.9\n  - 2011/12 Proj.: 3.5\n- Private sector credit (percent change):\n  - 2006/07: 22.9\n  - 2007/08: 31.4\n  - 2008/09 Est.: 56.1\n  - 2009/10 Proj.: 26.4\n  - 2010/11 Proj.: 19.9\n- Domestic investment (percent of GDP):\n  - 2006/07: 22.1\n  - 2007/08: 24.1\n  - 2008/09 Est.: 23.6\n  - 2009/10 Proj.: 27.3\n  - 2010/11 Proj.: 29.7\n  - 2011/12 Proj.: 30.2\n  - 2012/13 Proj.: 31.0\n- Public investment (percent of GDP):\n  - 2006/07: 4.9\n  - 2007/08: 9.2\n  - 2008/09 Est.: 11.1\n  - 2009/10 Proj.: 11.2\n  - 2010/11 Proj.: 10.6\n  - 2011/12 Proj.: 10.9\n  - 2012/13 Proj.: 11.1\n- Private investment (percent of GDP):\n  - 2006/07: 17.2\n  - 2007/08: 19.2\n  - 2008/09 Est.: 18.1\n  - 2009/10 Proj.: 18.6\n  - 2010/11 Proj.: 19.1\n  - 2011/12 Proj.: 19.6\n  - 2012/13 Proj.: 20.1\n- National savings (excluding grants, percent of GDP):\n  - 2006/07: 14.8\n  - 2007/08: 15.4\n  - 2008/09 Est.: 14.5\n  - 2009/10 Proj.: 17.7\n  - 2010/11 Proj.: 20.2\n  - 2011/12 Proj.: 21.3\n  - 2012/13 Proj.: 20.9\n  - 2013 Proj.: 22.2\n- Current account balance (including grants, percent of GDP):\n  - 2006/07: -6.1\n  - 2007/08: -5.3\n  - 2008/09 Est.: -5.9\n  - 2009/10 Proj.: -5.5\n  - 2010/11 Proj.: -5.8\n  - 2011/12 Proj.: -5.4\n- Net donor inflows (percent of GDP):\n  - 2006/07: 6.5\n  - 2007/08: 6.4\n  - 2008/09 Est.: 6.3\n  - 2009/10 Proj.: 6.1\n- Current account balance (excluding grants, percent of GDP):\n  - 2006/07: -7.3\n  - 2007/08: -8.8\n  - 2008/09 Est.: -9.0\n  - 2009/10 Proj.: -9.6\n  - 2010/11 Proj.: -9.5\n  - 2011/12 Proj.: -9.3\n- External debt (including Fund, percent of GDP):\n  - 2006/07: 11.0\n  - 2007/08: 14.3\n  - 2008/09 Est.: 12.3\n  - 2009/10 Proj.: 13.9\n  - 2010/11 Proj.: 15.6\n  - 2011/12 Proj.: 17.1\n  - 2012/13 Proj.: 18.3\n- External debt-service ratio (percent of exports of goods and nonfactor services, including Fund obligations):\n  - 2006/07: 1.2\n  - 2007/08: 2.6\n  - 2008/09 Est.: 1.6\n  - 2009/10 Proj.: 1.8\n  - 2010/11 Proj.: 1.3\n  - 2011/12 Proj.: 1.1\n- Government revenue (percent of GDP):\n  - 2006/07: 12.6\n  - 2007/08: 13.3\n  - 2008/09 Est.: 13.0\n  - 2009/10 Proj.: 12.9\n  - 2010/11 Proj.: 13.4\n  - 2011/12 Proj.: 14.4\n- Grants (percent of GDP):\n  - 2006/07: 4.5\n  - 2007/08: 5.3\n  - 2008/09 Est.: 3.1\n  - 2009/10 Proj.: 3.0\n- Total expenditure and net lending (percent of GDP):\n  - 2006/07: -18.2\n  - 2007/08: -21.0\n  - 2008/09 Est.: -17.8\n  - 2009/10 Proj.: -20.6\n  - 2010/11 Proj.: -20.4\n  - 2011/12 Proj.: -20.8\n  - 2012/13 Proj.: -21.4\n  - 2013 Proj.: -21.6\n- Overall balance (including grants, percent of GDP):\n  - 2006/07: -1.1\n  - 2007/08: -2.4\n  - 2008/09 Est.: -2.1\n  - 2009/10 Proj.: -3.5\n  - 2010/11 Proj.: -4.0\n  - 2011/12 Proj.: -3.9\n  - 2012/13 Proj.: -3.8\n- Overall balance (excluding grants, percent of GDP):\n  - 2006/07: -5.6\n  - 2007/08: -7.7\n  - 2008/09 Est.: -4.8\n  - 2009/10 Proj.: -7.0\n  - 2010/11 Proj.: -6.9\n  - 2011/12 Proj.: -6.8\n- Stock of domestic debt (percent of GDP):\n  - 2006/07: 9.3\n  - 2007/08: 11.6\n  - 2008/09 Est.: 10.7\n  - 2009/10 Proj.: 5.9\n  - 2010/11 Proj.: 5.2\n- Memorandum items:\n  - Nominal GDP (U Sh billions):\n    - 2006/07: 21,168\n    - 2007/08: 24,069\n    - 2008/09 Est.: 24,648\n    - 2009/10 Proj.: 30,782\n    - 2010/11 Proj.: 34,950\n    - 2011/12 Proj.: 38,363\n    - 2012/13 Proj.: 44,687\n    - 2013 Proj.: 51,287\n  - Average exchange rate (U Sh per US$): 1,778\n  - Treasury bill yield (percent): 9.4 (2006/07), 8.3 (2007/08)\n  - Overall balance of payments (US$ millions):\n    - 2006/07: 704\n    - 2007/08: 569\n    - 2008/09 Est.: 572\n    - 2009/10 Proj.: -92\n    - 2010/11 Proj.: 91\n    - 2011/12 Proj.: -78\n    - 2012/13 Proj.: -3\n    - 2013 Proj.: 61\n  - Gross foreign exchange reserves (months of next year's imports of goods and services):\n    - 2006/07: 6.0\n    - 2007/08: 5.7\n    - 2008/09 Est.: 5.6\n    - 2009/10 Proj.: 4.7\n\nPublic Information Notice (PIN) No. 09/23\n\n---\n\n\n References\n\n- Uganda and the IMF\n- Public Information Notices\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/pn0923"
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    "Published: February 17, 2009",
    "Uganda's economy has been among the fastest-growing in Sub-Saharan Africa, building on two decades of sound policies that delivered high growth, low inflation, and steady poverty reduction.",
    "In 2008 Uganda was affected by two major shocks:",
    "Near-term outlook and policy responses:",
    "Directors commended authorities for sound macroeconomic management that underpinned the strong performance and poverty reduction.",
    "Immediate challenges arise from the global downturn and reduced external financing; economy judged well-positioned due to low public debt, comfortable international reserves, and a relatively sound banking sector.",
    "Medium-term constraints highlighted:",
    "Fiscal policy guidance:",
    "Monetary and exchange rate policy guidance:",
    "Financial sector guidance:",
    "Real GDP (percent change):",
    "Headline inflation (end of period):",
    "Core inflation (end of period):",
    "Terms of trade (deterioration -):",
    "Real effective exchange rate (depreciation -):",
    "Broad money (M2, percent change):",
    "Domestic credit (percent change):",
    "Credit to the central government (percent of M3 at start of the period):",
    "Private sector credit (percent change):",
    "Domestic investment (percent of GDP):",
    "Public investment (percent of GDP):",
    "Private investment (percent of GDP):",
    "National savings (excluding grants, percent of GDP):",
    "Current account balance (including grants, percent of GDP):",
    "Net donor inflows (percent of GDP):",
    "Current account balance (excluding grants, percent of GDP):",
    "External debt (including Fund, percent of GDP):",
    "External debt-service ratio (percent of exports of goods and nonfactor services, including Fund obligations):",
    "Government revenue (percent of GDP):",
    "Grants (percent of GDP):",
    "Total expenditure and net lending (percent of GDP):",
    "Overall balance (including grants, percent of GDP):",
    "Overall balance (excluding grants, percent of GDP):",
    "Stock of domestic debt (percent of GDP):",
    "Memorandum items:",
    "[Uganda and the IMF](http://www.imf.org/external/country/UGA/index.htm)",
    "[Public Information Notices](https://www.imf.org/en/news/searchnews)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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