Uganda's inflation increased to 3 percent in April, up from 2.8 percent in March, primarily due to rising energy and transport costs, according to data from the Uganda Bureau of Statistics. Monthly prices rose by 0.6 percent, marking the fastest increase since February 2025, while food and core components showed contained price pressures.

In April, Uganda's private sector showed increased activity, with the headline purchasing managers' index rising to 55, its highest in five months, according to the Bank of Uganda's business tendency survey. Financial services experienced their strongest growth ever, indicating strong confidence in the sector, despite ongoing fuel-driven cost pressures. However, the survey also suggested that the underlying momentum may be losing some of its earlier strength.

Uganda's annual inflation rate increased to 3.2 percent in May from 3 percent in April, primarily due to rising fuel and transport costs associated with higher global oil prices. This trend has raised concerns at the Bank of Uganda regarding external inflation pressures, while food prices have remained relatively stable. The Uganda Bureau of Statistics reported a monthly consumer price rise of 0.7 percent.

According to the IMF's latest Regional Economic Outlook, Uganda is projected to be one of the fastest-growing economies globally over the next two years, despite a challenging environment for sub-Saharan Africa due to external shocks. The report highlights that while the region faces higher energy costs and tighter financial conditions, Uganda's growth is expected to accelerate significantly, driven by its oil sector.

The Monetary Policy Committee (MPC) of the Bank of Uganda (BoU) decided to keep the Central Bank Rate (CBR) at 9.75 percent during its meeting on 14 May 2026. The Committee noted that while risks from the Middle East conflict could increase inflation, the current monetary policy is deemed appropriate for the existing macroeconomic conditions. Inflation has remained below the medium-term target of 5 percent over the past year, ending in April 2026.

The Ugandan Minister of Finance presented the Budget Speech for FY 2026/27, which includes tax amendments impacting the energy and minerals sector. This annual event typically elicits varied reactions from the public, reflecting differing opinions on the proposed financial changes. The implications of these amendments for the sector are yet to be fully assessed.