IMF Executive Board Concludes 2026 Article IV Consultation with Uganda
IMF News, July 28, 2026
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Bibliographic details
- Published: July 28, 2026
Macroeconomic performance and outlook
- Growth reached 6.3 percent in FY2025/26 (Q1–Q3), maintaining the same strong momentum recorded in FY2024/25.
- Real GDP projections:
- 2025/26: 8.7
- 2026/27: 8.0
- 2027/28: 6.4
- 2028/29: 6.2
- 2029/30: 5.8
- Non-Oil real GDP:
- 2023/24: 6.0
- Headline and core inflation:
- Headline inflation (period average) 2025/26: 3.4
- Core inflation (period average) 2025/26: 3.9
- Headline inflation stood at 3.7 percent in June (2026)
- Core inflation stood at 3.4 percent in June (2026)
- Bank of Uganda’s medium-term core inflation target: 5 percent
- Projection on inflation path:
- Headline inflation expected to be above 5 percent in FY2026/27
- Core inflation projected to reach the BoU’s 5‑percent medium-term target before end‑2026
- International reserves and external sector:
- Gross international reserves reached $6.1 billion at end May 2026 (or about 2.7 months imports of goods and services)
- Current account balance:
- 2023/24: -8.0
- 2024/25: -5.4
- 2025/26: -3.2
- 2026/27: -1.9
- 2027/28: -2.0
- Current account balance (excluding grants):
- 2023/24: -7.3
- 2024/25: -5.6
- 2025/26: -3.4
- Exports (goods and services) 2025/26: 34.4
- Imports (goods and services) 2025/26: 34.7
- Despite strong coffee and gold exports, the current deficit remains high due to private sector imports of capital goods associated with investment activity, increased gold imports, and a wider services account deficit.
- Terms of trade (2025/26): 1.9
Fiscal developments and public debt
- Overall fiscal deficit:
- FY2023/24: -4.7 percent of GDP
- FY2024/25: -6.0 percent of GDP
- FY2025/26 (projected): -7.1 percent of GDP
- Subsequent projections:
- 2026/27: -6.6
- 2027/28: -6.2
- 2028/29: -6.3
- 2029/30: -6.4
- Drivers of fiscal deterioration:
- Weaker fiscal position driven by higher recurrent spending and rising interest payments.
- Spending pressures persisted in the first eight months of FY2025/26.
- Revenue and expenditure (central government, percent of GDP):
- Revenue and grants:
- 2023/24: 14.1
- 2024/25: 14.7
- 2025/26: 15.4
- 2026/27: 16.3
- 2027/28: 16.5
- 2028/29: 16.8
- 2029/30: 17.1
- Grants:
- 2023/24: 0.5
- 2024/25: 0.6
- 2025/26: 0.4
- Oil revenue:
- 2025/26: 0.0
- 2026/27: 0.1
- 2027/28: 1.7
- 2028/29: 2.1
- 2029/30: 2.2
- Expenditure:
- 2023/24: 18.8
- 2024/25: 21.7
- 2025/26: 22.0
- 2026/27: 22.5
- 2027/28: 22.8
- 2028/29: 23.1
- 2029/30: 23.3
- Current expenditure (percent of GDP):
- 2023/24: 13.2
- 2024/25: 15.2
- 2025/26: 15.8
- 2026/27: 15.5
- 2027/28: 15.7
- 2028/29: 16.0
- 2029/30: 16.4
- Capital (percent of GDP, include net lending and investment on hydropower projects; exclude BoU recapitalization):
- 2023/24: 5.5
- Primary balance and domestic borrowing:
- Primary balance:
- 2023/24: -1.6
- 2024/25: -2.3
- 2025/26: -2.1
- 2026/27: -1.4
- 2027/28: -1.2
- 2028/29: -1.0
- 2029/30: -0.3
- Net domestic borrowing (share of overall deficit):
- 2024/25: 5.6
- Public gross debt (percent of GDP):
- 2023/24: 50.6
- 2024/25: 52.3
- 2025/26: 55.1
- 2026/27: 55.5
- 2027/28: 55.9
- 2028/29: 57.1
- 2029/30: 58.2
- 2030/31: 59.2
- External debt:
- 2023/24: 28.1
- 2024/25: 27.2
- 2025/26: 27.3
- 2026/27: 25.4
- 2027/28: 24.1
- 2028/29: 22.4
- 2029/30: 21.9
- Domestic debt:
- 2023/24: 25.1
- 2024/25: 27.8
- 2025/26: 30.1
- 2026/27: 31.8
- 2027/28: 33.8
- 2028/29: 35.8
- 2029/30: 37.3
- Non-oil primary balance:
- 2023/24: -2.4
- 2024/25: -1.8
- Non-oil primary domestic balance:
- 2023/24: -0.1
- 2024/25: -0.8
- 2025/26: -0.5
- 2026/27: -0.4
Financial sector and monetary policy
- Bank of Uganda policy rate (latest available, May 2026): 9.8 percent
- Broad money (M3) growth:
- 2023/24: 13.3
- 2024/25: 11.2
- 2025/26: 14.6
- 2026/27: 13.4
- 2027/28: 11.7
- 2028/29: 12.3
- 2029/30: 11.6
- Credit to non-government sector:
- 2023/24: 9.7
- 2024/25: 10.3
- 2025/26: 9.1
- 2026/27: 8.9
- 2027/28: 8.6
- 2028/29: 8.5
- M3/GDP (percent):
- 2023/24: 20.4
- 2024/25: 20.7
- 2025/26: 20.9
- 2026/27: 21.0
- 2027/28: 21.1
- 2028/29: 21.2
- 2029/30: 21.4
- 2030/31: 21.5
- Non-performing loans (NPLs, percent of total loans; latest available December 2025): 3.7 (2023/24), 3.6 (2024/25)
- Directors commended the financial system’s strong capital and liquidity buffers, while calling for vigilant monitoring of the sovereign–bank nexus and structural measures to deepen lending and financial inclusion.
Executive Board assessment and policy recommendations
- Board views:
- Welcomed Uganda’s continued robust growth momentum, low and stable inflation, and favorable outlook bolstered by anticipated start of oil production.
- Expressed concern about the weakening fiscal position, high debt service burden, and crowding out of private sector credit.
- Noted significant downside risks, including spillovers from a prolonged conflict in the Middle East, tighter global financial conditions, further delays in oil production, and climate-related shocks.
- Fiscal policy recommendations:
- Stronger fiscal consolidation anchored in enhanced domestic revenue mobilization and improved expenditure discipline is needed to reduce debt vulnerabilities, ease crowding-out pressures, and rebuild policy space.
- Swift adoption and implementation of the Domestic Revenue Mobilization Strategy to broaden the tax base, improve administration, and rationalize tax expenditures.
- Strengthen budgetary discipline, including tightening controls on supplementary spending, improving spending efficiency, and enhancing public financial management.
- Establish a robust and transparent framework for managing oil revenues to safeguard sustainability and support intergenerational equity.
- Monetary and exchange rate policy recommendations:
- Support for Bank of Uganda’s tight monetary policy stance to anchor inflation expectations amid successive shocks and heightened global uncertainty.
- Monetary policy should remain data-driven and forward-looking, alongside continued efforts to enhance policy transmission.
- Highlighted importance of exchange rate flexibility for absorbing external shocks and the need to continue building foreign exchange reserves.
- Support for continued efforts to strengthen central bank independence, including full implementation of the 2021 Safeguards Assessment recommendations.
- Structural and governance recommendations:
- Accelerate structural reforms to improve the business environment and strengthen governance to support private sector-led inclusive growth and enhance resilience.
- Strengthen anti-corruption framework and the judiciary, reduce non-tariff barriers, and deepen regional trade integration.
- Continue efforts to strengthen climate resilience.
Risks and scenarios
- Key downside risks identified:
- Prolonged or intensified conflict in the Middle East.
- Ebola outbreak.
- Tighter global financial conditions.
- Potential delays in oil production.
- Climate‑related shocks.
- Near-term outlook sensitivities:
- Exchange rate movements, elevated energy prices, and higher transportation costs are expected to push headline inflation above 5 percent in FY2026/27.
- Start of oil production is expected to boost growth momentum and make lasting improvements in fiscal and external balances, conditional on effective management of oil revenues.
Selected key numerical indicators (highlights)
- Growth:
- Real GDP 2024/25: 6.3
- Real GDP 2025/26: 8.7
- Inflation:
- Headline June 2026: 3.7 percent
- Core June 2026: 3.4 percent
- Reserves:
- Gross international reserves: $6.1 billion at end May 2026 (about 2.7 months of imports)
- Fiscal balance:
- Overall deficit FY2024/25: -6.0 percent of GDP
- Projected overall deficit FY2025/26: -7.1 percent of GDP
- Public gross debt:
- 2025/26: 55.1 percent of GDP
- 2030/31: 59.2 percent of GDP
- Bank of Uganda policy rate (May 2026): 9.8 percent
- GDP at current market prices (USh. billion):
- 2025/26: 250,808
- 2026/27: 286,210
- GDP per capita (Nominal US$):
- 2025/26: 1,402
- 2026/27: 1,486
- Population (million, based on 2024 census): 45.9
Source: IMF Executive Board communiqué on the conclusion of the 2026 Article IV Consultation with Uganda.