Bank of Uganda (BOU) has maintained the Central Bank Rate (CBR) at 9.5 percent, Michael Atingi-Ego, the Central Bank Deputy Governor revealed. He said maintaining the rate reflects the Monetary Policy Committee’s assessment of the inflation outlook in the light of the incoming data. 

“The medium-term forecast for December 2023 shows that the inflation outlook remains unchanged compared to the October 2023 round of forecasts,” he said.

Inflation is projected to remain below 5% in the near term but return to the target in the medium term.

On the upside, the current geopolitical conflicts could escalate and feed into higher international oil prices passing through to domestic pump prices and renewing supply chain disruptions.

https://twitter.com/BOU_Official/status/1732390810484682884 

On the downside, research from BoU indicates that global inflation could decline faster leading to much lower imported inflation.

In addition, economic growth is projected at 6% in FY 2023/24 and increase to between 6% and 7% in the medium term. He explained that the growth is, however, subject to uncertainties, including slower-than-expected global and regional growth.

Other risky uncertainties include a resurgence of supply chain distortions if the geopolitical tensions escalate, tighter fiscal policy in part due to unfavorable global financial markets which could restrict government expenditure, and tighter credit conditions constraining household consumption and private sector investments.