Rwanda's real GDP grew by 7% on average more than the anticipated 6.3%, a new Standards and Poor's overview report released yesterday has indicated.
The growth is attributed to excellent performance in the services and industry sectors, and public and private sector investments which have continued to grow at a moderate and impressive pace.
Real GDP is the inflation-adjusted measure that reflects the value of all goods and services produced in a given year, (often referred to as constant price).
And according to the report, Rwanda maintained its credit worthiness at ‘B+ on the score card as was reflected by excellent external financing.
The country’s real GDP growth is projected to continue expanding at an average 7% going in the next three years.
Rwanda’s external and fiscal position is projected to remain resilient despite a change in multilateral funding of around 1.8% of GDP, the report indicated.
“We forecast general government deficits will average 3.4% of GDP over 2015-2018. We also estimate that the change in general government debt will average 3.4% of GDP over the same period, compared with 4.5% over 2010-2014.”
Under the new International Monetary Fund policy support instrument agreement, Rwanda is aiming to reduce donor reliance and increase its ratio of domestic tax revenues to GDP.
The government has earmarked various measures, including reviewing some value-added tax exemptions, implementing new taxes on mining activity, and collecting property taxes at the central government level. We think it may take many of these steps over the medium to long term.