World Bank2025-03-042025-03-042025-03-04https://hdl.handle.net/10986/42909The Ugandan economy continues to demonstrate resilience. Inflation in Uganda has significantly decreased, falling below the central bank’s target. On the external side, the current account deficit remained high despite some moderation due to improved merchandise trade performance. Fiscal consolidation efforts continue but need more focus on domestic revenue mobilization (DRM) to mitigate negative impacts on priority expenditures like human capital investment. The medium-term outlook for Uganda remains broadly positive, with significant downside risks. Human capital - the knowledge, skills, and physical health that enable people to be productive - will play a pivotal role in improving Uganda’s long term potential growth, especially for creating more jobs in non-oil sectors. The special topic of Uganda Economic Update (UEU) 24 focuses on the critical importance of early childhood development (ECD) for Uganda’s present and future prosperity. Early childhood is the most critical period for human capital formation, because this is when people acquire fundamental cognitive, social, and emotional skills that are essential for future productivity. Given the rapid pace of brain development in early life, investments in ECD are more effective and cost-efficient than attempting to make up for missed opportunities later.en-USCC BY-NC 3.0 IGOECONOMIC GROWTHMERCHANDISE TRADE PERFORMANCEFISCAL CONSOLIDATIONDOMESTIC REVENUE MOBILIZATION (DRM)HUMAN CAPITAL INVESTMENTReportWorld Bank10.1596/42909