Africa-Press – Uganda. Uganda’s economy recorded a mixed performance in December 2025, with rising inflation and a widening trade deficit contrasting with rapid growth in digital financial services, according to the latest Microeconomic Indicators and Developments (MIND) Report.
The report provides a broad snapshot of key economic, social, and market trends, highlighting areas of resilience alongside emerging vulnerabilities.
Inflationary pressures resurfaced in December, particularly in essential household expenditures. Monthly inflation for Food and Non-Alcoholic Beverages increased by 0.5 percent, reversing a similar decline recorded in November 2025.Inflation in Energy, Fuels, and Utilities (EFU) also rose by 0.4 percent in December, following a 0.2 percent drop the previous month, signalling rising living costs, especially in urban areas.
The residential property market in the Greater Kampala Metropolitan Area (GKMA) continued to expand, though at a slower pace. The Residential Property Price Index rose by 2.6 percent in the second quarter of FY2025/26, down slightly from 2.9 percent in the first quarter. Growth was strongest in Kampala Central and Makindye, where property inflation jumped to 4.6 percent from 1.4 percent, reflecting sustained demand for urban housing.
Digital Finance Drives Financial InclusionInflation in Energy, Fuels, and Utilities (EFU) also rose by 0.4 percent in December, following a 0.2 percent drop the previous month, signalling rising living costs, especially in urban areas.
The residential property market in the Greater Kampala Metropolitan Area (GKMA) continued to expand, though at a slower pace. The Residential Property Price Index rose by 2.6 percent in the second quarter of FY2025/26, down slightly from 2.9 percent in the first quarter. Growth was strongest in Kampala Central and Makindye, where property inflation jumped to 4.6 percent from 1.4 percent, reflecting sustained demand for urban housing.
Digital Finance Drives Financial InclusionUganda’s financial sector continued to deepen, driven by rapid expansion in agent banking and mobile money services. The number of agent banking outlets grew by 20 percent, from 32,076 in September 2024 to 38,757 in September 2025. Mobile money agents expanded by 23.8 percent over the same period, increasing from 883,343 to about 1.09 million nationwide.
According to the report, this growth has been instrumental in extending financial services to rural and underserved communities, narrowing the urban-rural divide and supporting the government’s financial inclusion agenda.
Labour Mobility and Health Concerns
Labour mobility increased in December, with the Immigration Department recording 3,932 migrant workers, an 8 percent rise from November 2025.
However, the report flagged health-related productivity risks, as malaria prevalence rose sharply by 58.3 percent, with deaths increasing from 1.2 to 1.9 per 1,000 people over the same period.
Energy Prices, Markets and Business Activity
Liquid energy fuels became marginally cheaper, with monthly inflation falling by 0.3 percent, largely due to a 0.2 percent decline in petrol prices. Meanwhile, the Uganda Securities Exchange All-Share Index slipped by 0.6 percent to 1,559.97 points in December, while new business registrations fell sharply by 40 percent, from 4,512 in November to 2,698 in December.
Global commodity markets showed a modest uptick, with the IMF Commodity Price Index rising by 0.3 percent to 166.8.
Trade Deficit Widens Sharply
Uganda’s external trade position deteriorated significantly, with the monthly trade deficit widening by 211.8 percent from US$74.5 million in October 2025 to US$232.3 million in November.
The decline was largely driven by reduced export earnings, particularly from gold, which fell from US$964.6 million in October to US$639.3 million in November. Electricity export receipts also declined during the same period.
Environmental Indicators Improve
On a positive note, air quality in Kampala improved slightly during the festive season. Average particulate matter levels declined by 6.5 percent, from 39.8μg/m3 in November to 37.2μg/m3 in December, largely attributed to reduced traffic and travel out of the city.
Outlook
The MIND report paints a picture of an economy experiencing strong gains in digital finance and financial inclusion, alongside mounting macroeconomic pressures. Rising inflation, a widening trade deficit, and health-related productivity challenges remain key concerns, while the rapid expansion of mobile money and agent banking provides a foundation for inclusive growth.
Policymakers are expected to prioritize price stability, export performance, and public health interventions, even as efforts to deepen financial inclusion continue. By tracking trends across living standards, markets, environmental sustainability, and social indicators, the MIND report remains a vital tool for guiding policy and investment decisions in Uganda.
For More News And Analysis About Uganda Follow Africa-Press
