Uganda’s private sector showed stronger confidence in August 2026, with business sentiment improving even as the shilling weakened and inflation edged higher, according to the latest economic indicators.
The Business Tendency Index (BTI) rose to 59.6 in August, up from 56.1 in July, remaining well above the 50-point threshold that separates improving from deteriorating business conditions. The Purchasing Managers’ Index (PMI) also remained positive at 55.0, pointing to continued expansion in private-sector activity.
The indicators suggest that businesses remained optimistic about economic conditions in the months ahead. The Bank of Uganda has previously identified sustained business and consumer sentiment as an important support to economic growth.
Economic activity remains resilient
The Composite Index of Economic Activity (CIEA) stood at 192.1 in July, a modest decline from 192.9 in June.
The slight moderation in the CIEA contrasts with the improvement in business sentiment, indicating that while measured economic activity eased marginally, businesses’ expectations about future conditions strengthened.
Uganda Bureau of Statistics data also shows that the economy has maintained a relatively strong growth trajectory, with preliminary estimates putting FY2025/26 economic growth at 6.4 percent.
Inflation edges higher
The improvement in business sentiment came alongside a small increase in consumer price pressures.
Annual headline inflation rose to 4.1 percent in August, from 4.0 percent in July, mainly due to higher prices for selected food crops and core goods. UBOS independently reported the same 4.1 percent August inflation reading.
However, inflation in Energy, Fuel and Utilities eased to 14.3 percent, from 14.9 percent in July, providing some relief from energy-related price pressures.
Shilling loses ground against dollar
The Ugandan shilling depreciated by 0.7 percent against the US dollar during August.
The average exchange rate moved from Shs3,704.51 per dollar in July to Shs3,730.25 in August, with increased foreign-exchange demand from the energy and manufacturing sectors outweighing inflows from commodity exports, NGOs and remittances.
The exchange-rate movement comes as Uganda continues to manage competing foreign-currency demands linked to investment and productive activity. The Bank of Uganda maintains responsibility for managing the country’s foreign-exchange reserves and implementing exchange-rate policy.
Exports provide a stronger external-sector signal
Uganda’s merchandise exports delivered one of the strongest signals in the latest data.
Export earnings increased 10.1 percent year-on-year, rising from $1.274 billion in July 2025 to $1.403 billion in July 2026—an increase of about $128.3 million.
The increase was driven by higher receipts from gold, maize, flowers, oil re-exports, beer, cocoa beans, cement and electricity, among other products.
The rise in exports provides an important source of foreign currency at a time when demand for dollars from domestic businesses has increased.
Taken together, the indicators present an economy in which business confidence and export earnings are strengthening, while inflation and exchange-rate pressures remain relatively contained but require monitoring.
The combination of a BTI of 59.6, a PMI of 55.0 and double-digit growth in merchandise export earnings points to continued private-sector activity. At the same time, the modest rise in inflation and depreciation of the shilling highlight the pressures facing households and businesses as demand for foreign currency increases.
UBOS continues to publish monthly inflation and other key economic indicators, while the Bank of Uganda’s August 2026 monetary-policy publications provide the latest assessment of economic and financial conditions.
