Fitch Ratings, a global credit rating agency, has improved Rwanda’s economic outlook to stable from negative, citing better access to international financing and reduced uncertainty over funding.

In a statement released on March 13, the rating agency said the outlook revision reflects greater confidence that the country will continue to secure external financing and that government debt will stabilise in the coming years.

Fitch Ratings also affirmed the country’s Long-Term Foreign-Currency Issuer Default Rating at ‘B+’, indicating that while the outlook has improved, the overall credit rating remains unchanged.

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According to Fitch, the improvement follows increased diplomatic engagement that has helped ease tensions in the region and reduced near-term risks related to external financing.

"External disbursements from multilateral and bilateral partners reached around $1 billion, or 6.1% of GDP, in the fiscal year ending June 2025 (FY25). Fitch expects official external loan commitments to remain strong, at about $1 billion annually, through fiscal years 2026 and 2027,” the statement said.

The agency also noted that about 89 per cent of the country’s public external debt is concessional, meaning it carries favourable interest rates and repayment terms, helping reduce the overall burden of borrowing.

However, despite the improved outlook, Fitch said public debt levels are expected to rise in the coming years before stabilising, driven by projects such as the construction of the new international airport in Bugesera and the expansion of the national airline.

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Even so, the concessional nature of most external borrowing is expected to help keep debt servicing manageable. Fitch forecasts that the interest-to-revenue ratio will remain below the projected ‘B’ rating median of about 16 per cent by 2027.

The agency also expects the fiscal deficit to narrow gradually as tax reforms introduced in the previous fiscal year begin to generate stronger revenue.

"The fiscal deficit will decline to 3.6 per cent of GDP in the fiscal year 2026, supported by improved tax collection and policy adjustments. However, lower grant inflows and rising pension spending could offset some of these gains.”

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Fitch estimates that real GDP growth reached 8 per cent in 2025 and expects the economy to continue expanding at above 7 per cent annually through 2027, above the ‘B’, rated country median of 4.5 per cent.

Growth is expected to be driven largely by strong construction activity, particularly infrastructure projects such as the Bugesera airport, alongside expansion in agriculture and tourism, according to the statement.