Uganda’s economy won’t grow at the rate forecast by the government because of a global slowdown, drought, high oil prices and declining agricultural exports, the World Bank said.
East Africa’s third-biggest economy may expand by 4 percent to 5 percent in the 12 months through June, Rachel Sebudde, the Washington-based lender’s country economist, told reporters today in Kampala, the capital. The final estimate has yet to be determined, she said.
The nation’s finance ministry in July forecast the economy would expand by 6.6 percent, driven by growth in the agriculture and service industries.
“Growth has remained subdued over the past three years on account of exogenous shocks,” Sebudde said. “Even the forecast of 5 percent in the financial year 2011-12 remains highly uncertain.”
Uganda, Africa’s biggest coffee exporter, experienced the worst drought in 60 years during the past season that led to food shortages.
The government of must take steps to ensure fiscal discipline, Sebudde said. The “continued use of supplementary budgets is affecting budget credibility and started to raise questions about the degree of fiscal control by authorities.”
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