Rwanda's GDP Slumps By 12% in Quarter 2, Covid-19 Blamed

19 September 2020

In the second quarter of 2020, the national Gross Domestic Product (GDP) plummeted by 12.4 percent, latest figures have revealed.

According to the National Institute of Statistics of Rwanda (NISR), the slump is attributed to measures in place to contain the spread of Covid-19.

The statistics body says that in Q2 of 2020, GDP at current market prices was estimated at Rwf 2.1 billion, down from Rwf2.3 billion in Q2 of 2019.

In May, global trade was predicted to decline by a record 27 percent in the second quarter of 2020, adding to a 3 percent decline in the first quarter of the year.

Industry and services were the worst hit, recording a decrease of 19 percent and 16 percent, respectively.

The main contributors to the drop in the industry sector were manufacturing, construction and mining activities which were completely halted during the lockdown period.

Financial services dropped by 8 percent, transport by 41 percent while wholesale and trade decreased by 22 percent.

The services sector continues to feel the pinch as some of its activities such as hotels and restaurants - which decreased by 62 percent - as well as entertainment remain under tough restrictions.

NISR reports that activities of public interests such as education dropped by 67 percent as schools remain closed since mid-March.

On a bright note, health services increased by 5 percent while information and communication activities rose by 33 mainly boosted by telecommunication activities since a huge part of people's lifestyles became virtual.

Agriculture sector dropped by an overall 2 percent. Food crops production decreased by 2 percent while export crops fell by 19 percent mainly driven by a sharp decrease in coffee production.

Despite the decrease, services continue to lead in terms of shares to GDP with 45 percent compared to 28 percent and 19 percent shares for agriculture and industry respectively.

The remaining 9 percent is attributed to net taxes on products.

Expenditure GDP

In Q2 of 2020, total final consumption expenditure decreased by 5 percent, with government expenditures decreasing by 18 percent while household consumption decreased by 2 percent.

Exports decreased by 24 percent and imports by 18 percent. Gross capital formation decreased by 34 percent.

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