Uganda projects public debt will surge to nearly half its annual economic output by June this year, driven by fresh borrowing to fund financial stimulus packages for its COVID-hit economy.<\/p>\n\n\n\n
The east African country\u2019s debt is seen rocketing to 49.9% of GDP by end-June, up from 41% the same month last year, according to a Ministry of Finance 2021\/2022 fiscal year budget planning paper, Reuters reports.<\/p>\n\n\n\n
The paper said the increase was due to a \u201cneed for extra borrowing to cover for both the revenue shortfalls and the Covid-related expenditure needs\u201d.<\/p>\n\n\n\n
Total public debt amounted to $15.27 billion at the end of June 2020, up from $12.55 billion a year earlier.<\/p>\n\n\n\n
\u201cAs the government continues to support economic recovery through provision of the economic stimulus package to various sectors, debt is projected to increase further over the near term amounting to 49.9 percent of GDP by end June 2021.\u201d<\/p>\n\n\n\n
The World Bank projected Uganda\u2019s economic growth in 2020 would plunge to as low as 0.4% from 5.6% the previous year, battered by the impact of COVID-19.<\/p>\n\n\n\n
Uganda\u2019s opposition and the IMF have in recent years expressed unease about the ballooning public debt and potential repayment problems.<\/p>\n\n\n\n
The government of President Yoweri Museveni, seeking to finance its infrastructure construction programme and shore up political support, has secured large credit lines from China over the last decade.<\/p>\n\n\n\n
According to the budget paper, Uganda\u2019s debt will peak at<\/p>\n\n\n\n
54% percent in the fiscal year ended June 2023 before starting to decline.<\/p>\n\n\n\n
Economic growth, the paper forecasts, will be between 4 and 5% in the fiscal year starting July helped by \u201cexpected recovery in aggregate demand following government interventions in reviving private sector activity.\u201d<\/p>\n\n\n\n
Last year the central bank said Uganda\u2019s surging public debt was becoming a drain on public resources that could otherwise be used to finance development.<\/p>\n","protected":false},"excerpt":{"rendered":"
Uganda projects public debt will surge to nearly half its annual economic output by June this year, driven by fresh borrowing to fund financial stimulus packages for its COVID-hit economy. The east African country\u2019s debt is seen rocketing to 49.9% of GDP by end-June, up from 41% the same month last year, according to a […]<\/p>\n","protected":false},"author":27983,"featured_media":15647,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_paywall_metabox":[],"jnews_override_counter":[],"footnotes":""},"categories":[356,98],"tags":[31],"class_list":["post-21594","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-big-story","category-news","tag-featured"],"yoast_head":"\n