KAMPALA: Uganda spent less in the first quarter of the financial year 2015 (from July to October) compared with the same period last year, due to the decline in oil prices and a reduction in imports, which saw the value of imported goods fall by $153.7 million.
The Bank of Uganda said the value of imported goods fell by 9.2 per cent from $1.68 billion for the July-October period in 2014 to $1.527 billion for the same period in 2015, due to a decline in the value of oil imports by 34 per cent, attributed to a fall in international oil prices.
Executive director of research at the Bank of Uganda Adam Mugume said non-oil imports by the private sector declined by 8.1 per cent, from $1.245 billion to $1.144 billion, which could be reflective of declining private sector demand as well as the impact of global disinflation.
In terms of exports, the Bank of Uganda monetary policy report shows that in the first four months of the 2015/16 financial year, the value of goods exported fell by 4.6 per cent compared with the same period in 2014/15, due to a reduction in the price index, which declined by seven per cent, as opposed to the volume index, which increased by 2.5 per cent.
While presenting the monetary policy statement for December, the BoU Governor Emmanuel Tumusiime-Mutebile said the projection for the real economic growth for 2015/16 remains at five per cent, with a low inflation rate.
However, there are downside risks to the projected growth, including those from the external economic environment.
“The major risk factors may include: Slower growth in major emerging market economies; further decline in global commodity prices; reduced access to external finance for developing countries due to heightened perceptions of risks, and possible monetary policy tightening in the US. Consequently, our balance of payments in the short to medium-term will remain vulnerable to external shocks,” said the governor.
