INFLATION AND ECONOMIC GROWTH IN UGANDA (1995~2O15)

TABLE OF CONTENTS

Contents

DECLARATION

APPROVAL

DEDICATION Ii

ACKNOWLEDGMENTS iv

TABLE OF CONTENTS v

LIST OF TABLES viii

LIST OF FIGURES ix

ABBREVIATION AND ACRONYMS x

ABSTRACT xi

CHAPTER ONE .........

PROBLEMS AND ITS SCOPE ~ 1

1.1 Background

1.2 Statement of the Problem 3

1.3 Purpose of the Study 4

1.4 Research objectives 4

1.5 Research Questions 4

1.6 Hypothesis of the study 5

1.7 Scope of the study 5

1.7.1 Content scope 5

1.7.2 Geographical Scope 5

1.7.3 The theoretical scope 5

1.7. 4 Time scope

1.8 Significance of the Study 5

1.9 Operational definitions 6

CHAPTER TWO ~7

L11REATURE REVIEW      7

2.1 Introduction 7

2.2 Economic Growth g

2.3 The relationship between inflation and economic growth 11

2.3 Conceptual Frame Work 13

2.4 Review of Related Literature 14

2.4.1 Theoretical Review 14

2.5 Related studies 16

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Research Design 25

3.2 Research Population 25

3.3 Sampling Technique 25

3.4 Research Instrument 25

3.5 Data Gathering Procedure and Source 25

3.6 Data Analysis 26

3.7 Limitations of the Study 27

CHAPTER FOUR .... 28

4.1 PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA (1995-2015)

The Trend of the Inflation of Uganda ~28

4.2 The trend of the GDP growth rate in Uganda (1995-20 15) 29

4.3 The relationship between import and GDP growth rate in Uganda (1995-2015) 30

4.4 Stationarity test 31

4.4.1 Autocorrelation Function and Partial Autocorrelation Function (ACF and d PAcT) 32

4.5 Correlations analysis of Inflation rate and GDP growth rate in Uganda 36

4.5.1 Regression analysis of Inflation rate and GDP growth 37

CHAPTER FIVE ...........................................................39

DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS ..........39

5.1 DICUSSION 39

5.2 CONCLUSIONS 39

5.3 RECOMMENDATIONS 40

5,4 Suggestions for Further Research 40

REFERENCES 41

APPENDICES 44

APPENDIX 1: The rate of GDP and inflation in Uganda (1995-2015) 44

APPENDIX 2: Autocorrelations Function of GDP growth rate in Uganda 45

APPENDIX 3: Partial Autocorrelations Function of GDP growth rate in Uganda 46

APPENDIX 4: AutocorrelationsFunction of Inflation rate in Uganda 47

APPENDIX 5: Partial Autocorrelations Function of Inflation rate in Uganda 48

ABSTRACT 

This study set out to investigate the relationship between inflation rate and economic growth rate (% annual GDP) in Uganda (1995-2015), the study employed time series survey data since examined data for a short time ,its objectives were; to establish the trend of import in Tanzania (1995-2015), to establish the trend of GDP growth of Uganda (1995-2015), to investigate the relationship between Inflation rate and GDP growth rate in Uganda (1995-2015), the hypothesis of the study was there is no significant relationship between inflation rate and GDP growth rate in Uganda time series analysis such Correlation analysis, regression analysis mechanisms were used. The trend of inflation rate has shown a general decrease over the period under study and GDP growth rate has shown a general increase for the period under study. Using the correlation, regression approach, there was a strong negative correlation between inflation rate and GDP growth(r=-0.805), there was a relationship between inflation rate and GDP growth at 0.05 level of significance, stationarity was tested and found that both inflation rate and GDP has trend by using ACF and PACF. There is relationship between Inflation Rate and growth Rate in Uganda which agreed with Khan (1992), Tobi (1994), Cooley (1990) study on inflation rate and GDP growth rate. The study has also supported the theory of aggregate demand stated by Keynes (1883-1946) which that there is a negative relationship between Inflation and Economic growth.