The influence of macro-economic indicators towards GDP in Uganda (1994-2018)

Abstract

This study empirically examined the influence of macroeconomic indicators towards Gross Domestic Product (GDP) in Uganda using annual data for the period of 1994 to 2018 obtained from World Bank development indicators. To achieve this objective multiple regression model was performed to examine the long run impact of the macroeconomic indicators on GDP in Uganda. Real GDP is taken as dependent variable whereas inflation rate, foreign direct investment, exchange rate, interest rate, terms of trade and unemployment as independent variables. Natural logarithm was taken to make equation linear. The empirical findings from regression showed that exchange rate has a significant positive effect on real GDP in long run. The findings also indicates that foreign direct investment has a significant positive impact on real GDP in long run. Further the results indicates that term of trade has a significant positive effect on real GDP in long run. However the findings revealed that inflation rate, interest rate and unemployment do not have significant effect on real GDP in long run.