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Uganda Business Forecast Report Q2 2013

Uganda Business Forecast Report Q2 2013 - new country guide report published

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2014-03-10 11:46:02 - Uganda Business Forecast Report Q2 2013 - a new country guide report on

We continue to expect that growth will accelerate in 2013, to 6.1% (compared to an estimated 4.8% in 2012), thanks to falling interest rates, strong investment, and relatively low inflation. Political risk has risen significantly amid rumours of a possible military intervention into Ugandas political system. While tensions remain high, we do not believe that a coup or other significant upheaval is likely.

Major Forecast Changes

Based on data and a dimmer outlook for aid flows, we have downgraded our budget forecast. We now expect the fiscal shortfall to be equal to 3.9% of GDP in FY2012/13, compared to earlier projections of 3.3%.

Key Risks To Outlook

Weather always poses risks to our outlook, as Uganda is heavily reliant on rain-fed agriculture. Adverse weather



conditions could seriously hamper economic output, while favourable weather could boost productivity. If there are further delays to oil production, or if the industry moves more quickly than expected, we would adjust our forecasts accordingly.

Infighting within the National Resistance Movement (NRM) ruling party, as well as ongoing protests orchestrated by opposition groups, pose a threat to Ugandas longstanding stability if underlying grievances are not adequately addressed.

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