Uganda Economic Update, 16th Edition, December 2020 : Investing in Uganda’s Youth
Uganda’s real GDP grew at 2.9 percent in FY20, less than half the 6.8 percent recorded in FY19, due to the effects of the COVID-19 (coronavirus) crisis, and is expected to grow at a similar level in FY21, but downside risks are high. Economic activ...
| Main Author: | |
|---|---|
| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/568041606834715531/Uganda-Economic-Update-16th-Edition-Investing-in-Uganda-s-Youth http://hdl.handle.net/10986/34893 |
| Summary: | Uganda’s real GDP grew at 2.9 percent in
FY20, less than half the 6.8 percent recorded in FY19, due
to the effects of the COVID-19 (coronavirus) crisis, and is
expected to grow at a similar level in FY21, but downside
risks are high. Economic activity stalled during the latter
part of the fiscal year due to a domestic lockdown that
lasted over four months, border closures for everything but
essential cargo, and the spillover effects of disruption in
global demand and global supply chains due to the COVID-19
pandemic. This resulted in a sharp contraction in public
investment and deceleration in private consumption, which
hit the industrial and service sectors hard, particularly
the informal service sector. On a calendar year basis, real
GDP growth is expected to contract by up to 1 percent in
2020, compared to 7.5 percent growth in 2019, and, as a
result, real per capita GDP growth is expected to contract
by about 4.5 percent. Even if GDP growth rebounds strongly
by 2022, the level of per capita GDP is likely to remain
well below its pre-COVID trajectory. As a result of these
impacts, the COVID-19 crisis is threatening to reverse some
of the gains made on structural transformation and the
declining poverty trend of the past decade. This
transformation was characterized by a reduction in the
workforce employed in on-farm agriculture and a take-off in
industrial production, largely in agro-processing. However,
following the COVID shock, there have already been
widespread firm closures, permanent layoffs in industry and
services, a rapid slowdown of activity particularly in the
urban informal sector, and a movement of labor back to
farming. At the same time, household incomes have fallen,
which is concerning given the high levels of vulnerability
to poverty, limited social safety nets, and impacts this
might have on human capital development and Uganda’s
capacity to benefit from its demographic transition. |
|---|