IMF: Economic Growth to slow down in 2016

The International Monetary Fund said this week that it expects Rwanda’s economy to slow this year and pick up in 2018, forecasting around 6% growth this year compared with 6.9% last year. It said Rwanda had agreed to pursue a more cautious monetary policy and put off some public spending to help slow the demand for imports. “The (IMF) mission expects that successful implementation of these policies will maintain economic growth at around 6 per cent, while keeping inflation below 5 per cent,” it said in a statement. “We are expecting growth of about 6% for the next two years. It could be higher. Then in 2018 we expect higher growth in line with Rwanda’s potential as some of these policies take effect,” Laure Redifer, who led an IMF mission to Rwanda, told a news conference.

The IMF said growth in 2015 was buoyed by construction, services, agriculture and manufacturing, but mining exports slowed. “Lower prices and demand for Rwanda’s minerals almost halved the country’s mineral exports, leading to a significant loss of export revenue,” its statement said. “This was exacerbated by lower-than-projected inflows of private capital and remittances, which together led to downward pressure on the Rwandan franc and foreign exchange reserves,” the statement said.

In its previous forecast in November, the IMF forecast growth of 6-6.5% for this year. The central bank said in February it expected economic growth to slow to 6.3% this year.

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