Economy grows by 5.2% in third quarter of 2016

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Agriculture was the second biggest contributor to GDP growth in Q3 of 2016, according to new NISR report. / File

Rwanda’s economy grew by 5.2 per cent during the third quarter of 2016, a report by the National Institute of Statistics of Rwanda (NISR) released over the weekend indicates.

The services and agriculture sectors were the biggest drivers of growth over the reporting period, according to the report. The services sector contributed 48 per cent of GDP, while the agriculture sector added 33 per cent and the industrial sector was responsible for 13 per cent of the GDP over the reporting period. About 5 per cent was attributed to adjustment for taxes and subsidies on products, NISR shows.

This performance pushed Rwanda’s GDP at current market prices to Rwf1,662 billion, an increase from Rwf1,506 billion in the same period of 2015.

According to a statement by Yusuf Murangwa, the NISR director general, this shows a 5.2 per cent increase in GDP growth compared to the same quarter in 2015. GDP is the monetary measure of the market value of all final goods and services produced in a period and are usually calculated on an annual or a quarterly basis.

In a statement released by the statistics body, agriculture grew by one per cent and contributed 0.4 percentage points to the overall GDP growth, while activities in the industry sector increased by 7 per cent or one percentage points.

The country’s service sector grew by 6 per cent and contributed 3 percentage points to the overall economic growth over the third quarter of last year.

In agriculture, food crop growth was at 2 per cent, while export crops declined by almost 13 per cent, mainly because of a reduction in coffee and tea exports.

However, the wholesale and retail trade segments grew by 9 per cent, hotels and restaurants 6 per cent and public administration at 19 per cent with information and communication dropping by 2 per cent.

“So far, the average GDP growth for the first three quarters of 2016 is about 6 per cent,” Murangwa said. The local economy is projected to expand by 6 per cent last year, which is one of the highest growth rates in sub-Saharan Africa and globally.

Last week, John Rwangobwa, the National Bank of Rwanda chief, said both the financial stability and monetary policy committees are confident Rwanda’s growth rate for 2016 would hit the 6 per cent projected by the government, the World Bank and the International Monetary Fund.

Government targets an annual growth rate of 11.5 per cent under the second Economic Development and Poverty Reduction Strategy (EDPRS II) programme.