Uganda’s Economy Shows Strong Momentum as Inflation Falls and Exports Surge

Uganda’s economy continued to register steady improvement in November 2025, according to the Performance of the Economy Report, supported by stronger business activity, easing inflation, and a sharp rise in exports.

High-frequency indicators point to growing economic confidence. The Purchasing Managers’ Index (PMI) rose to 53.8 in November 2025, up from 53.4 in October, signalling improved business conditions. Firms reported increased new orders and higher output, reflecting stronger demand across key sectors. Similarly, the Composite Index of Economic Activity (CIEA) increased to 183.50 in October 2025 from 182.40 in September, reinforcing the positive outlook for economic activity.

Business sentiment remained firmly positive, with the Business Tendency Index (BTI) standing at 57.20 in November 2025, well above the 50-mark threshold. Optimism was strongest in the manufacturing, wholesale trade and services sectors, reflecting confidence in near-term growth prospects.

Inflationary pressures continued to ease. Annual headline inflation declined to 3.1 percent in November 2025 from 3.4 percent recorded in October. This was mainly driven by a reduction in annual food crop inflation from 6.1 percent to 4.0 percent, supported by increased food supply. Annual core inflation also edged down slightly to 3.2 percent, further strengthening price stability.

Uganda’s external trade position improved significantly on a year-to-year basis. The merchandise trade deficit narrowed by 70.4 percent, falling from USD 251.56 million in October 2024 to USD 74.46 million in October 2025. This improvement was driven by a strong increase in exports of USD 726.84 million, which more than offset a USD 549.74 million rise in imports over the same period.

Merchandise exports nearly doubled, rising by 94.4 percent from USD 769.62 million in October 2024 to USD 1,496.45 million in October 2025. The growth was mainly attributed to higher export earnings from coffee, gold, crude oil–related products including simsim, palm oil and sunflower, as well as industrial products, cocoa beans and flowers, among others.

Alongside these positive economic developments, government reforms under the PIM PLUS Programme are expected to strengthen the performance of public investments. The programme, supported by the World Bank, is designed to reform how government plans, prepares, executes and manages public investments, addressing bottlenecks such as weaknesses in project preparation, execution, monitoring, maintenance and asset management.

PIM PLUS seeks to improve government efficiency, accountability and sustainability in public investments. One of its key targets is to increase the share of projects that undergo the Public Investment Management process and progress on time from 32 percent in 2025 to 55 percent by 2031. The programme focuses on improving resource mobilization, planning and budgeting with an emphasis on sustainability and climate resilience, strengthening project readiness, improving execution efficiency, and enhancing asset management and maintenance.

According to the Permanent Secretary and Secretary to the Treasury, Dr. Ramathan Ggoobi, the programme is central to Uganda’s long-term development ambitions. “PIM PLUS is the pathway to achieving ten-fold growth and accelerated socio-economic transformation,” Dr. Ggoobi said.

With improving business confidence, easing inflation, a stronger export sector and ongoing public investment reforms, Uganda’s economic outlook remains positive as the country positions itself for sustained growth and transformation.