The impact of macro-economic indicators on gross domestic savings in Uganda. (2009 – 2017)

Abstract

This study is about the impact of macro-economic indicators on the gross domestic savings in Uganda. This study sought to determine the impact of macro-economic indicators on the gross domestic savings in Uganda between the period 2009 and 2017. The study used secondary data from the World Bank for gross domestic savings data, broad money data, GDP data, inflation data and interest rate spread data. The data used is quarterly data covering the period from 2009 to 2017. The data was then analysed and presented using various tests and statistics such as descriptive statistics, correlation analysis, regression analysis, ADF test, Jarque Bera test, Johansen test, Heteroscedasticity test, Durbin Watson test, Granger Causality test and Ramsey reset test. The revealed a negative and significant relationship between broad money and gross domestic savings in Uganda, a positive and significant relationship between Gross Domestic Product and gross domestic savings in Uganda, a negative and significant relationship between inflation rate and gross domestic savings in Uganda, a positive and significant relationship between interest rate spread and gross domestic savings in Uganda is positive and significant. The study concluded that broad money, GDP, inflation rate and the interest rate spread have a significant relationship with GDS and therefore the study recommended that the government should make an equitable combination of monetary and financial policies needed with respect to broad money, inflation rate and interest rate spread, in order to increase the level of gross domestic savings in Uganda.