Rwanda's economy experienced a robust growth of 9.2 percent in the first quarter of 2023 compared to the same period in 2022, as revealed by a report from the National Institute of Statistics on Monday, June 19, 2023.

This growth is particularly notable considering a 3 percent decline in the production of food crops due to poor harvest in the last quarter.

The agriculture sector saw a 1 percent increase, while the industry and services sectors showed even stronger growth rates of 9 percent and 13 percent, respectively, during the first quarter of 2023.

ALSO READ: Rwanda’s economy grew by 8.2% in 2022

Despite a 3 percent decrease in food crop production, Yusuf Murangwa, the Director General of the National Institute of Statistics, highlighted the remarkable growth in export crops. The production of coffee and tea surged by 54 percent and 7 percent, respectively, contributing to a remarkable 25 percent growth in export crops.

"The poor harvest in Season A was attributed to the impact of climate change, with delays in rainfall in some areas and early cessation of rainfall in others. Additionally, flooding in certain regions affected crop yields," Murangwa explained

Within the industry sector, construction activities increased by 1 percent, mining and quarrying by 15 percent, and manufacturing activities by 16 percent. The manufacturing sector&039;s growth was driven by a 22 percent increase in food processing, a 26 percent increase in the manufacturing of metal products, machinery, and equipment, a 37 percent increase in the manufacturing of chemicals, rubber, and plastic products, an 18 percent increase in the manufacturing of wood and paper printing, and a 7 percent increase in the manufacturing of non-metallic minerals.

ALSO READ: Industrialists report growth as Rwanda seeks more manufacturers

In the services sector, wholesale and retail trade recorded a growth of 17 percent, transport activities increased by 19 percent, hotel and restaurant services grew by 42 percent, financial services increased by 12 percent, telecommunication services saw a remarkable growth of 43 percent, while professional and scientific services experienced a decline of 6 percent. Public administration services increased by 7 percent, and education services grew by 13 percent.

However, health services recorded a negative growth of 3 percent, following a substantial growth of 22 percent in the same quarter of 2022.

In terms of shares to GDP, services continued to lead with 44 percent, followed by agriculture with 27 percent, industry with 22 percent, and 8 percent attributed to adjustment for taxes and subsidies on products. The gross domestic product (GDP) at current market prices was estimated at Rwf3,901 billion, up from Rwf3,021 billion in the first quarter of 2022.

Despite the 3 percent decrease in food crop production, Minister for Finance and Economic Planning, Uzziel Ndagijimana, expressed optimism about the decline in consumer prices. He noted that consumer prices have been continuously decreasing, dropping from 21 percent in December 2022 to 14 percent in May of this year.

"We are projecting a continuous decrease, despite the global challenges we are still facing, including the effects of climate change," Ndagijimana said.

In the upcoming fiscal year, the government plans to allocate approximately Rwf20 billion for irrigation projects. The National Institute of Statistics of Rwanda (NISR) reported a steady decrease in inflation since the beginning of the year, with inflation rates of 19.3 percent in March, 20.8 percent in February, and 20.7 percent in January.

During the Central Bank's quarterly economic review, Governor John Rwangombwa emphasized that inflation is expected to continue decreasing and reach the target range of 2 percent to 8 percent by the end of 2023.