With about three months to the end of the 2011/2012 financial year, a senior economist at the Uganda Bureau of Statistics has said Uganda may not achieve the projected real Gross Domestic Product if the current economic volatilities continue.
Dr Chris Ndatira Mukiza, the Ubos director macro-economic statistics, said last week that if things remain the way they are, Uganda will not hit its GDP target unless serious mitigations are undertaken to boost productivity.
The IMF last week further downgraded Uganda’s GDP growth to 4 per cent from an earlier downgrade of 5.5 per cent that was revised from 6.4 per cent last year.
The downgrade is premised on the current tough economic environment, characterised by double digit inflation, weak performance of the local unit and high lending rates, which have constrained productivity.
According to data released last week, quarterly GDP for the October-December quarter of 2011/2012 is estimated to have declined by 2.3 per cent from Shs5.7 trillion, compared to Shs5.5 trillion.
GDP - the measure of economic performance – refers to the market value of all final goods and services produced within a country in a given period. It is also used as a primary indicator to gauge the health of a country’s economy. The decline in quarterly GDP resulted from slowed activity exacerbated by the central bank’s tight monetary policy, which cut back on private sector credit as well as the high cost of imported raw materials resulting from the depreciation of the shilling and inadequate electricity supply.
ndustrial sector value added declined further by 12 per cent in the second quarter of the current financial year to Shs1.2 trillion from Shs1.4 trillion, representing a 3.5 per cent fall for the July – September quarter.
However, the services sector’s value added grew by 3.5 per cent to Shs3.3 trillion in the second quarter from Shs3.2 trillion, a 5.9 per cent growth was registered in the first quarter, due to growth in wholesale and retail trade, hotels and restaurants, transport and communication and financial services.
Agriculture also grew by 3 per cent from Shs785 billion to Shs809 billion over the period under review.