Inflation and Economic Growth in Uganda 1980-2010

ABSTRACT 

The study was carried out to determine the relationship between the level of inflation and the level of economic growth (growth rate) in Uganda between 1980-2010. The study used the expostfacto research design and descriptive co relational survey design. The researcher also used annual statistical records about inflation rate as measured by consumer price index (CPI) and growth rate. The researcher used purposive sampling strategy in the process of data collection and used record sheets as research instruments in the process of data collection. The~ data was analyzed using the Statistical Package STATA. Pearson’s correlation coefficient (r) was computed to determine the nature of the relationship between the level of inflation and the level of economic growth in terms of growth rate. Regression analysis was also used to determine the strength of the relationship between inflation and economic growth in terms of Gross Domestic Product. The findings of the study were; there is no significant relationship between the level of inflation and the level economic growth in terms of Gross Domestic Product. The coefficient of determination (r2) was 0.11 which meant that inflation only explains ll% of the variation in economic growth. This signifies that, there are other predictor variables that do explain the remaining 89% Of the variation in economic growth such as investment level, employment level among others. The researcher concludes that, inflation is not the only factor that influences economic growth but there are other factors. The researcher recommends that the government of Uganda should put up structural reforms to minimize inflation since it was found to have a negative impact on long run economic growth, the government of Uganda should allocate more funds to the agriculture sector, provide favorable investment climate and give more favors to the local investors, find ways of increasing foreign exchange inflow and minimize foreign exchange out flow for example through setting up both export promotion industries and import substitution industries respectively.

TABLE OF CONTENTS

Chapter

Declaration A

Declaration B ii

Approval sheet iii

Dedication iv

Acknowledgement V

Abstract vi

Table content vii

List of tables x

List of figures xi

One THE PROBLEM AND ITS SCOPE

Background OF the study 1

Statement of the Problem 6

Purpose of the Study 7

Research Objectives 8

Research Questions 8

Hypothesis 9

Scope 9

Significance of the Study 10

Operational Definitions of Key Terms 11

Two LITERATURE REVIEW

Review & Related Uterature 13

Theoretical Perspectives 16

Related StudIes 17

Three METHODOLOGY

Research DesIgn 20

Research Population 20

Sample Size • 20

Sampling strategies 21

Research Instrument 21

Data Gathering Procedures 21

Data Analysis 22

Ethical ConsIderatIons 23

Umitatlons of the Study 24

Four DATA PRESENTAflON, ANALYSIS AND INTERPRETAflON 25

Five FINDINGS CONCLUSIONS AND RECOMMENDATIONS

Findings 33

Conclusions 34

Recommendations 35

References 37

Appendices

Appendix I - Transmittal Letter 41

Appendix II - Clearanc~e from Ethics Committee 42

Appendix III - Informed Consent 44

Appendix IV - Research Instrument 45

Appendix V - Proposed Data Presentation through Tables/Graphs 47

Appendix VI - Proposed Budget 48

Appendix VII - Time Frame 49

Researcher’s Curriculum Vitae so