Rwanda’s economy expected to keep growing, says IMF

By Olga Ishimwe
On 3 October 2018 at 07:20

Rwanda’s economy is projected to keep growing after its GDP has averaged 8.6 percent in the first half of 2018. The Inflation also is projected to remain low after its 5.5 percent monetary policy rate remained unchanged in September this year observed an International Monetary Fund (IMF) staff team that concluded a two week visit in Rwanda.

The International Monetary Fund (IMF) staff team led by Emre Alper and Laure Redifer, visited Kigali from September 20 to October 2 to conduct discussions on the tenth and final review of Rwanda’s Policy Support Instrument (PSI) -supported program.

The PSI is an instrument of the IMF designed for countries that do not need balance of payments financial support.

Laure Redifer who led the IMF visiting team said that while Rwanda’s economy grew by 8.6 % in the first half of 2018, there is hope for Rwanda to achieve its projected 7.2 year growth.

“After rising to 6.1 percent in 2017, real GDP growth averaged 8.6 percent in the first half of 2018, consistent with the projected end-year growth rate of 7.2 percent in 2018. Robust growth in 2018 reflects strong industrial activity, notably construction. Inflation remains low, in part reflecting favorable food price developments, and is projected to average around 2.8 percent in 2018,” he said.

Redifer explained that inflation is expected to remain close to the medium-term inflation target because the Central Bank of Rwanda kept the monetary policy stance unchanged in September, maintaining the policy rate at 5.5 percent through 2018.

Redifer said “Rwanda’s external buffers remain strong. The authorities have undertaken policies to improve Rwanda’s competitiveness, diversify production, promote exports, and contain imports.”

“With export growth of 17.9% in the year to August 2018, and import growth of 7.4%, the trade balance has continued to improve,” he said.

Laure Redifer said Rwanda met targets of PSI.

“Implementation of Rwanda’s PSI-supported macroeconomic program has been strong. All quantitative targets for the tenth and last review were met, and structural benchmarks are expected to be completed. The PSI-supported program has been successful in supporting Rwanda’s overarching objective of sustaining inclusive growth and poverty reduction,” Redifer revealed.

Rwanda’s Minister of Finance and Economic Planning, Dr. Uzziel Ndagijimana said that according to the economic growth projections Rwanda had in the past five years, Rwanda’s GDP will keep growing.