Uganda’s economic activity strengthens as business confidence rises and inflation holds steady
The improvement in economic activity has been underpinned by growing optimism among business operators and investors
KAMPALA, January 23, 2026 — Uganda’s economic activity continued to strengthen in the months leading up to December 2025, supported by improving business confidence and favourable demand conditions, according to the Performance of the Economy Report for December 2025.
High-frequency indicators point to sustained expansion. The Purchasing Managers’ Index [PMI] rose to 54.0 in December 2025 from 53.8 in November, remaining firmly above the 50-point threshold that separates expansion from contraction in economic activity.
Similarly, the Composite Index of Economic Activity [CIEA] maintained its upward trajectory, increasing to 181.48 in November 2025 from 180.41 in October 2025.
The improvement in economic activity has been underpinned by growing optimism among business operators and investors. This is reflected in the Business Tendency Index [BTI], which increased to 57.20 in December 2025 from 56.20 in November 2025.
Annual headline inflation remained unchanged at 3.1 percent in December 2025, indicating sustained price stability. This outcome was largely driven by a moderation in core inflation, particularly services inflation, which offset increases in food crops inflation as well as Energy, Fuel and Utilities [EFU] inflation.
The Ugandan shilling also remained relatively stable against the US dollar in December 2025, trading at an average mid-rate of Shs 3,575.23 per US dollar, compared with Shs 3,575.14 per US dollar in November 2025.
Meanwhile, Uganda’s merchandise trade deficit narrowed by 32.4 per cent in November 2025 compared to the same period a year earlier, declining from US$ 343.7 million in November 2024 to US$ 232.3 million. The improvement was mainly attributed to stronger export growth, which helped to reduce the trade gap.
Export earnings increased by 70.4 per cent, rising from US$ 698.46 million in November 2024 to US$ 1.19 billion in November 2025, driven largely by higher receipts from coffee and gold exports.
https://thecooperator.news/wb-flags-ugandas-fiscal-pressures-amid-strong-economic-growth/
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