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Economy grows by 2.1% in Q1, 2023 [Upd 2] - Uganda Newswire

Economy grows by 2.1% in Q1, 2023 [Upd 2]

The economy grew by 2.1% in real seasonally adjusted GDP in the first quarter of 2023, compared to Q1 of 2022.

It hence went up slightly by 1.8% over Q4 of 2022, preliminary estimates of the quarterly national accounts published on Monday by the National Institute of Statistics (INS) show.

In terms of quarterly variations, the GDP volume rose by 0.8%, against 0.7% in Q4 of 2022.

Despite the prevailing inflationary pressures, domestic demand grew by 1.8% at an annual rate, making it the main structural engine of growth, contributing by 1.9% to economic growth in Q1.

The foreign trade balance contributed by 0.2%, as the volume of goods and services exports saw a 12.3% increase, slightly exceeding that of imports (10%).

Despite the 3.1% drop posted in the performance of the agricultural sector, year-on-year, which is expected to worsen over the remainder of the current year, economic activity benefited above all from the relative dynamism of the services sector, whose added value rose by 3.2%, contributing 2.0 percentage points to economic growth in Q1.

This is explained by the rise in the added value of the hotel, restaurant and coffee shops services sector (16.3%), the transport sector (5.3%) and the IT and communication sector (4.8%).

Likewise, the manufacturing sector grew by 2.2% year-on-year in Q1 of 2023.

However, the added value of the energy, mining, water, sewerage and waste treatment sector fell by 10.1%, due to the 15.7% drop in the output of the oil and natural gas extraction sector and 9.6% in the mining sector, year-on-year.

The INS also show a negative year-on-year growth in the building and construction sector (-1.6%) during the first quarter of the current year.

Overall, the industrial sector recorded a relative year-on-year decline of 1.1%, the INS said, pointing out that despite the upward trend in growth, the GDP did not recover the level reached at the end of 2019.

Source: Agence Tunis Afrique Presse

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