IMF projects 2% growth for Rwandan economy

IMF projects 2% growth for Rwandan economy

Rwanda’s economy will grow by 2 percent in 2020 before rebounding back to strong growth rates next year, the International Monetary Fund has noted.

While this is a slowdown in comparison to 9.4 percent growth in 2019, Rwanda will be one of the few African countries to experience growth.

Following the Covid-19 pandemic, economies across the world have been adversely affected and are undergoing a recession.

Sub-Saharan Africa is expected to experience a recession, contracting by 3 per cent with a majority of countries experiencing negative growth rates.

For Rwanda, the IMF projected a growth of 2 per cent for 2020 and 6.3 per cent in 2021.

Despite the growth, Rwanda can anticipate a rise in consumer prices by an annual average of about 6.9 percent in 2020 from 2.4 percent in 2019.

In Rwanda, CPI is calculated based on ‘household basket’ which includes 1,622 products sold across the country.

In the process, the National Institute of Statistics makes observations in various places including shops, markets, hospitals, schools among others.

For the Sub-Saharan Africa region, with a difficult recovery ahead, the IMF noted that policymakers have fewer resources at their disposal as they cautiously lift restrictions and reopen economies.

Abebe Aemro Selassie, Director of the IMF’s African Department, said that in 2021 regional growth is forecast at 3.1 per cent in 2021 which is less in comparison to most parts of the world.

“This is a smaller expansion than expected in much of the rest of the world, partly reflecting sub-Saharan Africa’s relatively limited policy space within which to sustain a fiscal expansion. Key drivers of next year’s growth will include an improvement in exports and commodity prices as the world economy recovers, along with a recovery in both private consumption and investment,” he said.