The Bank of Uganda held its benchmark lending rate for the fifth consecutive time at 10% on August 15th, to support growth, as economic activity slowed in the first two quarters of the year. The GDP growth is projected at 6-6.3% in 2019, supported by strong domestic demand and improvements in the agricultural sector. Over a 2-5 year horizon, growth must remain robust, averaging 6.2 percent per annum. Still, policymakers pointed some downside risks to the outlook, namely external factors linked to a subdued global demand, alongside domestic ones such as weather-related constraints and delays in implementation of public investment programmes. Regarding inflation, though it slowed sharply to a 7-month low of 2.6 percent in July, the near-term inflation forecasts are higher than in June. Interest Rate in Uganda averaged 12.89 percent from 2011 until 2019, reaching an all time high of 23 percent in November of 2011 and a record low of 9 percent in February of 2018.
Interest Rate in Uganda is expected to be 9.50 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Uganda to stand at 9.25 in 12 months time. In the long-term, the Uganda Interest Rate is projected to trend around 8.75 percent in 2020, according to our econometric models.