Do savings matter for Uganda’s economic growth? A case for Uganda.

Abstract

This study examines the impact of Domestic savings on Economic growth in Uganda using quarterly data for the period 2000 to 2019. The study employed a time series analysis using the Auto Regressive Distributed Lag (ARDL) methodology augmented by the bounds test. In the long run, Gross Capital Formation, Labor, Inflation, Gross Domestic Savings, and Trade Openness are positive and significantly related to Gross Domestic Product while Foreign Direct Investment has a negative significant relationship to Gross Domestic Product. The results reveal that Gross Domestic Savings as the major focus of this study has a significant positive impact on Gross Domestic Product in the long run. This implies that over time, policymakers should focus on increasing the level of domestic private savings. Secondly, appropriate strategies regarding trade openness such as; reduction of both tariff and non-tariff barriers and the promotion of integration among countries should be emphasized for a meaningful contribution to the economic growth of Uganda.