Saturday, November 1, 2008

Uganda economic growth to slow to 7-7.5 percent: IMF

KAMPALA (Reuters - 31 oct. 2008) - The International Monetary Fund expects Uganda's economic growth to dip to 7.0-7.5 percent in 2008/09 (July-June) due to high inflation and the crisis in global markets, the body said on Friday.

A worldwide economic downturn may take the edge off of sub-Saharan Africa's impressive growth record since the 1990s, which has lured investors to view the continent as the last frontier for emerging markets.

"The IMF staff estimates economic growth to slow, albeit to a still healthy 7 to 7.5 percent in the 2008/09 fiscal year," the organisation said in a statement.

The IMF said growth in 2007/08 was 9.75 percent at market prices. In June, Finance Minister Ezra Suruma estimated gross domestic product would grow at 8.1 percent in 2008/09 compared to 8.9 percent in 2007/08.

The IMF said high inflation as well as reduced exports and foreign investment would see growth slow this fiscal year.

"Over the medium term, the fundamentals of the Ugandan economy remain strong," Roger Nord, assistant director for the African department, told reporters.

East Africa's leading economies have been hard hit this year by rising crude and commodity prices that have boosted inflationary pressures.

The IMF said it expected core inflation in Uganda to fall to 7 percent by June 2009.

"It should be possible to bring down core inflation to 7 percent by June 2009, and to 5 percent by August," Nord said.

The Uganda Bureau of Statistics said on Friday core inflation, which excludes food crop items, fuel, electricity and metered water, fell to 13.1 percent in October from 13.5 percent in September.