The Ugandan economy has demonstrated remarkable macroeconomic resilience, accelerating sharply during the first half of the 2025/26 financial year. Despite global market uncertainties and regional pressures, the country is outperforming expectations, signaling a major structural transformation. According to the latest data from the Ministry of Finance, Planning, and Economic Development, this surge is largely attributed to a spike in industrial output and the high anticipation surrounding the upcoming commencement of domestic oil production.
During a performance review held in Kampala, Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury (PSST), revealed that the economy expanded by a staggering 8.5% in the second quarter. This represents a significant leap from the 5.4% growth recorded during the same period in the previous year.
Ggoobi emphasized that the economy is holding firm and gaining momentum despite external shocks, driven by robust domestic demand, increased investment, and strong export performance, all of which are translating into higher production levels across all major sectors. For the first half of the current financial year, average growth reached 6.7%, a notable improvement over the 5.8% seen in FY 2024/25.
This economic expansion is described as broad-based, cutting across agriculture, services, and industry, which indicates growing economic depth. The industrial sector, in particular, has emerged as a powerhouse, registering 9.1% growth compared to 6.4% last year. This success is fueled by increased manufacturing, a boom in construction projects, and enhanced electricity generation to power industrial hubs. Furthermore, aggregate demand has surged by 15.2%, while investment grew by 14.4%, reflecting a high level of business confidence among both local and foreign investors.
Looking ahead, the government has revised its annual GDP growth projection upward to 7.0%. By June 2026, Uganda’s economy is expected to be valued at approximately $68.4 billion, which translates to an average annual income of about $1,399 (roughly Shs 5 million) per citizen. While Ggoobi cautioned that this per-capita figure does not account for gaps in income distribution, it serves as a vital benchmark for Uganda’s journey toward middle-income status. To ensure this wealth reaches the grassroots level, the government is leaning on initiatives such as the Parish Development Model (PDM) and Emyooga.
In addition to growth, Uganda has maintained impressive macroeconomic stability, with inflation averaging 3.3%—well below the government’s 5% target. This stability is supported by a resilient Ugandan Shilling, which remained steady at Shs 3,762.6 per US dollar as of March 2026. The country’s external position has also strengthened, with foreign exchange reserves rising to $5.9 billion, providing 4.1 months of import cover. Diaspora remittances have further bolstered the economy, contributing over $807 million in just six months.
