KAMPALA (Reuters) – Uganda’s economy is seen expanding by 5 percent in the 2017/18 fiscal year, up from 4 percent in the previous period, lifted by favourable weather, the International Monetary Fund said.
The East African economy is Africa’s biggest coffee exporter followed by Ethiopia and also cultivates a range of other agricultural commodities including tea, cocoa and tobacco.
“Growth is projected to reach 5 percent in 2017/18 (July-June) from 4 percent in 2016/17, supported by better weather conditions,” the IMF said in a statement released late on Friday.
Private sector credit growth remained slow, and the IMF praised the central bank for extending its ongoing policy easing cycle. Last month Bank of Ugandan, the central bank, cut its benchmark policy rate by 50 basis points to 9.5 percent.
It was the first time the bank had lowered the rate to below the psychologically important level of 10 percent since the country introduced an inflation targeting monetary policy in 2011.
The IMF said core inflation was projected to remain around the medium term target of 5 percent.
Reporting by Elias Biryabarema; Editing by George Obulutsa and Toby Chopra