World Bank, IMF Raise Rwanda’s 2018 Growth Estimate to 7.2%

KIGALI (Capital Markets in Africa) – The World Bank and International Monetary Fund revised their projection for Rwanda’s economic growth this year to 7.2 percent as rains improved food supply.

The revision comes after Rwanda’s government posted 10.6 percent growth in gross domestic product in the first quarter of 2018 after services, which make up almost half of national output, accelerated. Rwanda is one of Africa’s top performers and has expanded an average of more than 7 percent a year since President Paul Kagame took office in 2000.

The World Bank previously forecast growth at 6.2 percent. It now also expects the GDP to expand 7.5 percent in 2019, from an earlier estimate of 7.1 percent, according to a statement in the Rwandan capital, Kigali. Growth in the following year is seen at 7.8 percent.

“We revised the projections because of the growth momentum in exports and agriculture and the narrowing of external imbalances,” Senior Economist Aghassi Mkrtchyan said.

Rwanda’s fiscal deficit for 2018 to 2020 is expected to be about 4 percent of GDP, he said in an interview.

The IMF echoed the World Bank’s estimates for 2018 but expects faster growth of 7.8 percent next year and 8 percent in 2020, Mission Chief Laure Redifer told reporters Wednesday. Its previous estimate was 6.5 percent expansion this year.

The IMF expects the inflation rate to slow down to 2.8 percent from 4.5 percent on improving food supply and a stable exchange rate. Risks to the $8.4 billion economy include unpredictable weather, adverse regional politics and a small production and export base that remains vulnerable to shocks, Redifer said.

Source: Bloomberg Business News