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.

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 electricity regulator has announced that power tariffs will remain largely unchanged for the second quarter of 2026, as a strengthening shilling has balanced out a slight increase in global fuel prices. The Electricity Regulatory Authority noted that the approved end-user tariffs for April to June reflect changes in macroeconomic factors, but ultimately maintain stable pricing. The Ugandan shilling appreciated against the US dollar, reducing pressure on costs associated with dollar-denominated electricity generation.

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.

In February, Uganda's coffee export volumes increased significantly, with the country exporting 651,933 60-kilogram bags valued at $181 million, according to the Ministry of Agriculture, Animal Industry and Fisheries. This represents a 15 percent year-on-year increase in volumes and a 5.8 percent rise in earnings, despite a decline in global prices, which fell to an average of $4.63 per kilogram from $4.71 in January.

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.