KAMPALA, June 15 (Reuters) – Uganda has cut its budget deficit forecast for the 2023/2024 fiscal year and plans to increase total spending by 10% from the current period, Finance Minister Matia Kasaija said in his budget speech on Thursday.
The International Monetary Fund (IMF) has praised the country’s response to the economic impact of the war in Ukraine and the tightening of global financial conditions, which included support to vulnerable households, and a tightening of monetary policy to contain inflation.
The budget deficit will shrink to 3.5% in the next fiscal year, which starts next month, from 5.1% in the current financial year, Kasaija said.
Next fiscal year’s spending is 10% higher than the previous period at 52.7 trillion shillings ($14 billion).
The east African nation is expected to spend 8.7 trillion shillings on external debt repayments in the new fiscal year, he told lawmakers in Kampala.
Uganda maintained its growth projection at 6%, up from a forecast 5.5% in the previous period, driven by robust growth in infrastructure and the provision of cheap credit, Kasaija said.
Economic activity related to the planned construction of a $2.2 billion standard gauge railway, a crude oil refinery and a $3.5-billion crude oil export pipeline would bolster growth, he said. Uganda is expected to start commercial production of its oil deposits in 2025.
The minister pledged the “provision of affordable credit for micro and small enterprises” to boost economic expansion.
Uganda’s total public debt stock, a major concern for its opposition parties, was projected to ease slightly to 48.2% in the fiscal year ending this month, down from 48.6% a year ago.
“In order to live within our means, we have reduced consumptive expenditure. During next financial year, there will be no purchase of new vehicles for political leaders and public officers,” he said.
($1 = 3,688.0000 Ugandan shillings)
(Reporting by Elias Biryabarema; Writing by Hereward Holland and Bhargav Acharya; Editing by James Macharia Chege and Sharon Singleton)
