Uganda’s economy gains momentum as Shilling strengthens against the dollar, trade deficit narrows
Further bolstering the positive outlook, Uganda’s trade deficit with the rest of the world contracted by 15.2 percent.
Uganda’s economy demonstrated robust performance in June 2025, according to the latest Performance of the Economy Report. The report highlights a strengthening Ugandan Shilling against the US Dollar and a significant narrowing of the nation’s trade deficit, signaling a period of positive momentum.
The Ugandan Shilling continued its upward trend, appreciating by a notable 1.3 percent against the US Dollar in June 2025. It traded at an average mid-rate of Shs 3,605.84/USD, an improvement from Shs 3,653.40/USD recorded in May 2025. This appreciation is primarily attributed to increased dollar inflows stemming from strong export earnings and a rise in Foreign Direct Investment (FDI).
Further bolstering the positive outlook, Uganda’s trade deficit with the rest of the world contracted by 15.2 percent. It narrowed to USD 110.85 million in May 2025, a significant decrease from USD 130.67 million in May 2024. This improvement was a direct result of a substantial surge in export earnings, which effectively offset the increase in the country’s import bill over the same period.
Export earnings soared by an impressive 36.8 percent, reaching USD 1,198.86 million in May 2025, up from USD 876.40 million in the corresponding month of the previous year. This remarkable growth in exports was mainly driven by boosted earnings from key agricultural commodities such as coffee and cocoa, alongside a notable increase in mineral products.
Beyond the currency and trade figures, high-frequency indicators of economic activity showed a general improvement in the overall economic landscape during May and June 2025. Business sentiment within the Ugandan economy remained overwhelmingly positive, as indicated by the Business Tendency Index (BTI) staying consistently above the crucial 50-mark threshold in June 2025, signifying expansionary conditions.
The positive trends detailed in the June 2025 report paint an optimistic picture for Uganda’s economic trajectory.
