Uganda’s Economic Forecast & Risk Ahead of 2026 Elections
As Uganda heads into the final months before the 2026 general election, the economic landscape is offering both hope and warning signs. New projections from the World Bank and domestic institutions suggest that although GDP growth remains strong, inflation pressures, rising public debt, and constrained household incomes could shape voter perceptions and policy priorities.
Key Projections
The World Bank forecasts inflation rising to 4.5% next year, up from ~3.2%. By 2026, inflation might reach 5%, driven largely by increased commodity prices, expansionary fiscal policies, and possible exchange rate pressures.
GDP growth is expected to remain robust—projected at 6.2% in FY 2024/25, then rising toward 6.6‑7.0% in FY 2025/26, especially if oil and gas production begins as planned.
Public debt is climbing. The debt‑to‑GDP ratio is expected to be ~50.5% in 2025, rising to 51.9% in 2026. Debt servicing is consuming a large share of revenue, which limits spending flexibility in social sector
Risks and Challenges
Household incomes may lag behind inflation, especially for lower income segments. Rising costs of imported goods, fuel, and food staples could erode purchasing power.
Private sector credit is being squeezed by tight monetary policy; this may slow business investment and growth in non‑oil sectors.
Delay in oil production or lower than expected output could dent projected growth. The economy is banking heavily on the oil & gas sector to provide a medium‑term boost.
As the election draws near, government spending may increase (for political campaigns, infrastructure promises, subsidies), which could worsen fiscal deficits.
Implications
Political impact: Many voters are sensitive to cost of living. If inflation spikes or public services deteriorate, that may become a critical campaign issue.
Policy pressure: The government will need to manage debt carefully, prioritize spending, and possibly seek ways to raise revenue without stifling economic growth.
Investment climate: Foreign investors will watch closely; stability, regulatory certainty, and return on investment are essential for continued FDI inflows.
