Uganda Maintains Low Inflation as Shilling Strengthens
Kampala, Uganda
Uganda’s inflation has held steady at low levels in recent months, bringing a sense of relief to households coping with global price pressures. At the same time, the Ugandan shilling has been gaining strength against major currencies, a shift attributed to coordinated monetary and fiscal policies. Finance Minister Matia Kasaija says this stability is a sign that government economic planning is beginning to yield tangible macroeconomic benefits
The rise in private-sector credit is another encouraging trend. Small and medium-sized businesses are gaining access to more affordable financing through government-supported programs, which is helping revitalise activity in agriculture, manufacturing, services, and trade. As more enterprises tap into development financing, Uganda’s domestic business environment is showing promising signs of resilience.
Still, the strengthening shilling poses challenges. Some exporters worry that their products may become less competitive in regional markets if the currency continues its upward rise. Policymakers now face a delicate balancing act between keeping inflation low and ensuring that Uganda’s export sector remains strong.
Why It Matters
Stable inflation helps preserve household purchasing power, supports investor confidence, and creates a predictable environment for businesses. But a stronger shilling could put pressure on exporters, who play a major role in Uganda’s long-term growth strategy.
What to Watch
Analysts are watching whether inflation remains low, whether the shilling’s upward trend continues, and how exporters respond to shifting currency conditions. There is also interest in how much additional credit reaches SMEs and whether lending programs translate into real economic expansion.
