The Bank of Uganda (BOU) has predicted a slowdown in the economy in the last half of the current financial year 2019/2020 by between 3% and 4% due to coronavirus.
This is a drop in the earlier predicted economic growth of 6.5%.
In a monetary policy statement released by the BOU governor prof Tumusiime Mutebile, the covid-19 pandemic has led to a severe contraction in economic activity due to a combination of global supply chain disruptions, travel restrictions and a sudden decline in demand.
He says social distancing measures have also heightened uncertainty and affected consumer facing sectors and service sectors like insurance and finance.
Mutebile says due to the deteriorating macroeconomic conditions, the monetary policy committee (MPC) has decided to slash the central bank rate by 1% to 8% as a measure to ensure adequate access to credit and the normal functioning of financial markets.