Rwanda's economy to see fast growth in next three years: World Bank

Source: Xinhua| 2019-06-25 23:38:34|Editor: Mu Xuequan

Video PlayerClose

KIGALI, June 25 (Xinhua) -- Rwanda's economic growth is expected to be in the range of 7.6 to 8 percent annually between 2019 to 2021, the World Bank said in a medium-term economic outlook report released on Tuesday, in Rwandan capital city Kigali.

"Supported by conducive macroeconomic policies, Rwanda continues to enjoy a strong economic momentum characterized by high growth and low inflation," Aghassi Mkrtchyan, senior economist at the World Bank said in a statement on the report.

"While public investments will continue to support the growth over the medium-term, Rwanda needs to strengthen its private sector to stay on a high growth trajectory in the long-run," said Mkrtchyan.

Public sector-led investments will be central to maintain the projected outlook while the fiscal deficit will remain elevated over the medium term to accommodate higher public investment, said the report.

With inflation low, monetary policy is expected to remain accommodative and support recovery in bank lending while a flexible exchange rate will help to build external buffers and will facilitate export growth, it said.

However, the report said Rwanda's economic outlook is vulnerable to both domestic and external risks.

Domestically, the main risks are weather-related, such as droughts and floods that may depress agricultural production, it said.

Scaling up of public-sector-led investments is a challenge as well as an opportunity, and that could jeopardize debt sustainability if Rwanda's investments-growth nexus does not improve, the World Bank warned.

The main external risks are related to a more severe slowdown in global economic growth than is currently projected that would affect prices for the commodities Rwanda exports, according to the report.

The report also said Rwanda's economy expanded at 8.6 percent in 2018. The growth was broad-based with agriculture expanding by almost 6 percent while industries, supported by construction and manufacturing, grew by more than 10 percent, and the service sector recorded 9 percent growth, it said.