Rwanda’s economy expanded by 8.6 percent in 2018 as a result of robust performance of all sectors of the economy, International Monetary Fund (IMF) said on Friday.The country continues to register notable progress in sustaining high and inclusive growth, Laura Redifer, IMF head of mission to Rwanda told reporters.
She also noted that progressive performance in 2018 triggers a continued growth this year.
“Growth is projected to remain strong in 2019 at 7.8 percent and over the medium term at around 8 percent,” she said.
Construction of Bugesera International Airport, Hakan peat plant and electricity infrastructure will bolster growth this year, Rdifer told reporters.
The IMF sees Rwanda’s continued investment in ICT, Tourism, Agriculture, health and education to push economic growth projections.
Amidst this growth, IMF said inflation remained well below the Central Bank’s targeted inflation range (2-8%) reflecting ample food supplies and low inflationary pressures.
“Inflation is expected to remain low in the first half of 2019, picking up in the second half of 2019 for an average of 3.5 percent for the year,” IMF said in a statement.
The statement, however, bends on the performance of this year’s season A outcome, international prices and accommodative fiscal and monetary policies to lead inflation forecast.
“Over the medium term, inflation is expected to return to around its benchmark of 5 percent,” IMF says.
Meanwhile the Washington-based lender’s team, after meeting with several senior government officials, concluded its 2 weeks mission by reaching preliminary agreement with the government – subject to approval by IMF management and its executive board, on policies that could constitute the basis for Rwanda’s new programme with the IMF under the new Policy Cordination Instrument (PCI).
IMF says that the overall objective of the programme would be to support implementation of the strategy for transformation, while maintaining macroeconomic stability.
The programme would consist of four main pillars; a medium term fiscal path that allows for more spending on National Strategy for Transformation (NST) goals while maintaining public debt at a sustainable level.
The second is mobilization of domestic resources to support development goals through broadening the tax base and strengthening tax compliance.
The programme will also base on building fiscal transparency as well as supporting implementation of the National Bank of Rwanda’s new forward-looking monetary policy operational framework through development of financial markets and broader access within the economy to financial resources.