As the global economy is increasingly becoming volatile, Rwanda’s national economic growth is expected to grow above 7 per cent, with strong growth in agriculture sector services, central bank said yesterday.
Although estimates by IMF downgraded the global economic growth to 4.3 per cent this year compared to 5.1 per cent in 2010, Rwanda’s central bank maintains the country’s economic growth forecasts at 7 per cent
Governor, Amb Claver Gatete, said economic performance in the second quarter of this year was encouraging and a decision to revise the target would be taken after the second quarter GDP data.
“For the year 2011, economic growth was initially expected to decline marginally from 7.5 per cent in 2010, however, according to current developments in key indicators of economic activities, performance is likely to rise beyond initial projection of 7.5 percent,” the central bank said in the monetary policy and financial satiability statement that was released yesterday.
In the period between January and June, the agriculture sector expanded by 11.3 per cent due to overall favourable weather conditions and crop intensification program, the central bank said.
“We are not comfortable to be in this situation but we are monitoring the situation on day to day basis, depending on IMF and World Bank figures,” Amb. Gatete said.
The national economy may well be threatened by the turbulent regional and global economic situation, where fuel and food prices are on the rise.
Gatete said food pressure, which are a major concern in the region are likely to impact on domestic food prices, transport and imported inflation.
Food crisis in the region is attributed to the drought in Kenya and some parts of Uganda.
Uganda and Kenya are Rwanda’s major trade partners in the region with total trade value of $567.5m.
“We can not be certain 100 per cent, external pressure is a mixture of economic and political aspect that requires a close watch to make judgment but we’ll not shy away to take any decision,” Gatete assured.
“We never projected that USA ratings would go down and impact major markets and exports.”
The non agricultural economic activities performed well during the first half of 2011.
In nominal terms, it increased by 9.5 per cent to 8.7 percent at the same period last year boosted by a significant growth in industry which recorded a turnover of 31.8 per cent, the statement said.
It added that the turnover of large companies in industry and service sectors rose by 23.9 per cent on annual basis in the first half of 2011 against 20.9 per cent at the same period last year.