Rwanda’s economy is poised to grow beyond the 6.6 percent initially forecast for 2024, driven by all the sectors according to the Governor of the National Bank of Rwanda, John Rwangombwa.
Speaking at today’s presentation of the Monetary Policy and Financial Stability Statement, Rwangombwa highlighted the nation’s strong recovery trajectory, citing robust performance across key sectors.
“We have recorded 9.8 percent growth in the first half of this year, and the outlook is even stronger for the rest of 2024,” Rwangombwa said, stressing the ongoing expansion in Rwanda’s services and industrial sectors, which have posted double-digit growth. Agriculture, which had shown weaker performance over the past two years, “has also rebounded, contributing to the positive outlook,” He said.
The governor detailed how the country’s recovery has built momentum since the COVID-19 pandemic, with Rwanda’s GDP registering a strong growth of 10.9 percent in 2021, following a 3.4 percent contraction in 2020. The country’s economic growth reached 8.2 percent in 2022 and 2023.
“When you look at the composite index tracked by the Central Bank for the first two quarters and quarter three of this year the performance remains strong,” Rwangombwa said.
Despite the broad-based growth, challenges remain in Rwanda’s export sector. ‘The performance is not yet reflected in our export figures,’ Rwangombwa said, expressing concern.
Merchandise exports dropped 0.9 percent in the first half of 2024, compared to an 11.2 percent increase in the same period last year. While, imports continued to rise, at 5.7 percent of the first half of this year, verses a 17.4 percent increase a year earlier. This widening trade deficit, prompted calls for stronger efforts by both the government and private sector to close the gap by the Governor.
On inflation, the central bank has reported progress in stabilizing price levels after a period of high inflation. Inflation spiked to 21 percent in the fourth quarter of 2022, driven by external shocks, prompting the central bank to hike its benchmark interest rate from 4.5 percent in early 2022 to 7.5 percent by mid-2023. With inflation now stabilizing at around 5 percent, the bank begun easing monetary policy, cutting the key rate to 7 percent in May and further reducing it to 6.5 percent at its August meeting.
Rwangombwa expressed confidence that inflation would remain stable at around 5 percent through 2025, provided no significant global disruptions occur. However, he cautioned that rising geopolitical tensions could impact global trade routes and commodity prices, which may alter the central bank’s outlook.
