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Bank of Uganda has in the June 2019 Monetary Policy Committee (MPC) meeting decided to maintain the Central Bank Rate at 10 percent. #BoUCBR
The inflation outlook over the 12 months horizon was largely unchanged compared to April 2019 forecast round, although risks remain elevated. #BoUCBR
Preliminary estimates by Uganda Bureau of Statistics (UBOS) indicate the economy expanded by 6.1 percent in financial year 2018/19, partly as a result of strong growth in household consumption.
Growth was largely supported by accommodative monetary policy stance and a resultant growth in private sector credit, fiscal impetus and multiplier effects of public infrastructure investments, ensuing strong domestic demand conditions and improved agricultural performance.
Downside risks to economic growth remain as previously stated. On the external scene, the escalating global trade tensions could weaken Uganda’s external position and lead to volatility in the domestic foreign exchange market.
On the domestic scene, weather related constraints to agricultural production, delays in the implementation of public investment programmes, and supply side constraints to growth in the private sector could dampen economic activity.
The May 2019 Consumer Price Index (CPI) data released by UBOS indicates that inflation remains relatively subdued. Both annual headline and core inflation declined to 3.3 percent and 4.6 percent from 3.5 percent and 4.8 percent respectively in April 2019.
Low headline inflation is in part supported by relatively low food crop prices. Nonetheless, food crops inflation rose to minus 5.4 percent in May 2019 from minus 6.2 percent in April 2019.
Based on this assessment the MPC has decided to maintain the CBR at 10 percent.
