Market Update: Uganda’s Economy Shows Continued Strength as Business and Exports Rise – Finance Ministry – Full Analysis

Uganda’s economy maintained positive momentum in the months leading to December 2025, buoyed by improving business confidence, stable prices, and strong export performance, according to the Ministry of Finance’s Performance of the Economy Report for December 2025.

The report indicates that overall economic activity and perceptions about doing business in the country continued to strengthen, supported by favorable demand conditions. This trend is reflected in several high-frequency indicators that remained firmly in expansionary territory.

The Purchasing Managers’ Index (PMI), a key gauge of private sector activity, rose to 54.0 in December 2025 from 53.8 in November. A PMI reading above the 50-point mark signals expansion, suggesting sustained growth in business output and new orders.

Similarly, the Composite Index of Economic Activity (CIEA) maintained an upward trajectory, increasing to 181.48 in November 2025 from 180.41 in October.

The Ministry attributes this improvement to rising optimism among business operators and investors, a sentiment further reinforced by the Business Tendency Index (BTI), which increased to 57.20 in December from 56.20 in November 2025.

Inflation remained subdued, pointing to continued price stability. Annual headline inflation was unchanged at 3.1 percent in December 2025.

This stability was largely driven by a moderation in core inflation—particularly services inflation—which offset increases in food crops prices as well as Energy, Fuel and Utilities (EFU) inflation.

The external sector also showed signs of resilience. In December 2025, the Uganda shilling remained relatively stable against the US dollar, trading at an average mid-rate of Shs 3,575.23 per dollar, virtually unchanged from Shs 3,575.14 recorded in November.

Trade performance improved markedly over the year. Uganda’s merchandise trade deficit narrowed by 32.4 percent, declining from USD 343.7 million in November 2024 to USD 232.3 million in November 2025. This improvement was mainly driven by strong export growth.

Export earnings surged by 70.4 percent, rising from USD 698.46 million in November 2024 to USD 1,190.51 million in November 2025. The increase was largely attributed to higher receipts from coffee and gold exports, underscoring the growing contribution of these commodities to foreign exchange earnings.