Low inflation, consumer confidence sustain favourable business conditions

Mawejje Jeseph and Corti Lakuma

No 243925, Uganda Business Climate Index from Economic Policy Research Centre (EPRC)

Abstract: The Uganda business climate continued to improve. The index for the current quarter (July - September 2014) is 117.2 and has improved by 24.2 points on a year-on-year basis and by 13.5 points on a quarter-on-quarter basis. The rise in the index suggests continued favourable conditions for doing business in Uganda. The continued improvement in the business climate was driven largely by: low inflation which ensured favourable input and product prices and stronger consumer confidence, which in turn drove business expectations of improved profitability. Despite these positive sentiments, production capacity remained well below potential thus constraining labour demand to a significant degree. Indeed, both indices for capacity utilization and employment improved only modestly indicating underlying risks to business expansion and employment creation. Business perceptions and expectations for the next quarter (October – December 2014) remain favourable on account of expected continuity in price stability. However, persistent challenges due to electricity outages, access to finance and the proliferation of substandard and counterfeit products pose serious risks for doing business.

Keywords: Community/Rural/Urban Development; Consumer/Household Economics; Financial Economics; Institutional and Behavioral Economics; Labor and Human Capital (search for similar items in EconPapers)
Pages: 4
Date: 2014-09
New Economics Papers: this item is included in nep-mac
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Working Paper: Low inflation, consumer confidence sustain favourable business conditions (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eprcug:243925

DOI: 10.22004/ag.econ.243925

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