By Namugerwa Martha

Uganda’s economic growth has been estimated to decline by 0.8% in the Financial Year 2016\17 compared to the Financial Year 2015\16.

In a monetary policy statement for June 2017 released by the Governor of Bank of Uganda Prof. Emmanuel Tumusiime Mutebile today, he said that the economy has continued to grow at a moderate pace and according to the latest Gross Domestic Product (GDP) estimates which were released by the Uganda Bureau of Statistics (UBOS), the economy is estimated to grow by 3.9% in the FY 2016\17.

“The economy is estimated to grow by 3.9 in the FY 2016\17 compared to the growth rate of 4.7 in the FY 2015\16,” Mutebile said.

monetary policy statement released by the BoU

He added that the slowdown in the economic growth is mainly due to the drought that affected agricultural production which triggered the change in the Consumer Price Index (CPI), increasing it to 7.2% in May 2017 from 6.8% in April 2017.

“The sharp increase in food crops and higher energy prices, food crops inflation rose to 23.1% from 21.6% in April 2017, “ Mutebile added.

Mutebile further added that slow implementation of public investment projects and weak private sector growth also contributed equally to the slowdown of the economic growth.

However, Mutebile added that economic growth is projected to pick up to 5.0% in the FY 2017\18 if supported by the improved efficiency and effectiveness in implementation of public investments, higher foreign direct investments particularly in the oil sector and recovery in private sector credit growth.