Perceptions indicate elevated risks in the business (April - June 2014)

The Uganda business climate has continued to improve for the third successive quarter. The current (April - June 2014) index is 103.7 percentage points. The index has risen by 20 percentage points from 86.4 percent recorded in April – June 2013. The rise in the index is a good indicator of the continued favourable conditions of doing business in Uganda. The improvement in the business climate was sustained by a variety of factors including: stronger than expected consumer demand, stable macroeconomic environment characterized by easing inflation which dropped to an average of 5.7 percent in the current quarter from an 7.0 percent in the previous quarter, a 1.5 percent depreciation in the exchange rates, and lower interest rates (21.5 percent). Demand for Ugandan export products in both regional and international markets weakened at the end of the quarter owing to geopolitical risk such as the civil strife in South Sudan. Business perceptions and expectations for next quarter (July – September 2014) are upbeat. Overall the business climate has continued to improve but at a declining trend. However, there are elevated risks in the business environment. In particular, performance in the agricultural sector is well below potential.

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Created Date: 06-30-2014
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