March 23, 2018: Rwanda’s economy is projected to grow by 7.2% boosted by services as well as booming construction sector according to the International Monetary Fund (IMF).
Speaking at a joint press conference Laure Redifer, the IMF mission to Rwanda chief observed that Rwanda’s economy is rebounding. “Economic growth in 2017 outpaced expectations, rising 6.1 percent, due to a broad-based pick-up in activity in the second half of the year. Meanwhile, inflation has remained very low, 0.7 percent in February over the previous year, due to ample food supplies causing food prices to decline,” Ms. Redifer said at the conclusion of a 10-day mission visit to Rwanda.
The Minister of Finance and Economic Planning Claver Gatete noted that the initial growth projections for 2018 indicate the economy will grow by 7.2% and between 7.8% to 8% in 2019.
“Growth will be supported by the rebound in the construction sector as well growth in the manufacturing sector especially in the context of Made in Rwanda. The service sector especially the tourism sector will continue to grow and have a positive impact other sectors. Agriculture is expected to perform well due to good rains in Season A and B as well as investments in the sector,” Minister Gatete said.
The IMF mission chief indicated that external imbalances have continued to decline, on the basis of exchange rate adjustment and other policies to improve competitiveness and diversify Rwanda’s production and exports. At the same time, foreign exchange reserves are accumulating faster than anticipated, and pressure on the Rwandan franc has abated.
Ms. Redifer further pointed out that tax revenues have increased more than expected and that the supplementary resources will be used for additional public spending in priority areas, especially health, education and irrigation for agriculture.
The IMF team was in the country from March 14-23, 2018 to conduct discussions on the ninth review of Rwanda’s Policy Support Instrument where it met with various senior government officials, the parliamentary budget committee, private sector representatives, and development partners.