Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the third reviews under the Policy Coordination Instrument (PCI) and the arrangement Under the Resilience and Sustainability Facility (RSF), and first review under the Standby Credit Facility (SCF) arrangement with Rwanda.[1] The Executive Board's decisions were taken without a meeting.[2] With this review, about US$ 76.2 million (SDR 57.5 million) under the RSF and US$ 88.4 million (SDR 66.75 million) under the SCF become available.
Despite challenging external conditions , Rwanda's economy maintains robust growth. Real GDP growth surpassed expectations in 2023 at 8.2 percent, with services, construction, and post-flood recovery in food crop production key contributors. While fiscal consolidation may temporarily dampen growth, a rebound to 7.3 percent is anticipated in the medium term. Inflation has declined steadily since January 2023 to 4.2 percent in March, thanks to a slowdown in food prices and core inflation. The current account deficit widened more than expected in 2023, but international reserves remain adequate at about 4.1 months of imports at end-2023.
Going forward, the policy mix should prioritize macroeconomic and financial stability, fiscal sustainability, and the restoration of buffers. A carefully planned fiscal stance is needed to mitigate the impact of the 2023 floods while maintaining a credible and balanced fiscal consolidation over the medium term. Monetary policy should target inflation within the desired range, while maintaining exchange rate flexibility to manage external shocks. Furthermore, vigilant oversight of financial stability risks, particularly concerning large exposures and rapid credit growth, is important.
Program performance remains strong. Under the PCI/SCF, all quantitative targets were met, and reforms on the social safety net and spending rationalization were implemented. RSF measures to implement climate budget tagging, integrate climate risks into fiscal planning, and strengthen disaster risk management were also implemented, contributing to Rwanda's resilience to climate shocks and positioning the country as a leader in regional climate initiatives.
Rwanda: Selected Economic Indicators, 2023-29
2023
2024
2025
2026
2027
2028
2029
Act.
Est.
Proj.
Proj.
Proj.
Proj.
Proj.
Output
Real GDP growth (%)
8.2
6.6
6.5
6.8
7.2
7.3
7.3
Prices
Inflation - average (%)
14.0
4.9
5.1
5.0
5.0
5.0
5.0
Central government finances (fiscal year)1
Revenue (% GDP)2
22.6
22.3
22.2
23.6
23.8
23.4
20.8
Expense (% GDP)2
19.0
18.6
17.9
17.6
17.1
16.9
15.0
Fiscal balance (% GDP)3
-7.4
-6.7
-5.2
-3.4
-3.1
-3.1
-2.8
Public debt (% GDP)
73.5
80.0
80.0
77.5
74.6
71.0
66.2
External public debt (% GDP)
56.9
65.0
67.5
69.5
68.4
67.2
65.3
Money and credit
Broad money (% change)
22.8
9.2
14.2
7.9
14.2
12.6
11.4
Credit to private sector (% change)
19.9
17.2
12.9
16.2
15.1
13.3
12.1
Policy Rate, end-of-period (%)
7.5
...
...
...
...
...
...
Balance of Payments
Current account (% GDP)
-11.7
-12.1
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-11.1
-10.0
-9.6
-8.6
-7.6
Reserves (in months of imports)
4.1
4.1
4.3
4.4
4.5
4.5
4.5
Exchange rate
REER (% change)
-0.8
...
...
...
...
...
...
Sources: Rwandan authorities and IMF staff estimates.
1 Based on fiscal year (i.e., 2023 represents 2022/23).
2 Revenue and expenditure use GFSM 2014 presentation.
3 For purposes of the PCI the overall balance (GFSM 1986 definition, incl. policy lending) is used for monitoring.
[1] The PCI and RSF arrangement were approved on December 12, 2022, the latter with a total amount of SDR 240.3 million (about US$ 321.66 million or 150 percent of quota), and the second reviews were completed on December 14, 2023. A 14-month SCF amounting to US$ 268.05 (SDR 200.25 million) was approved on December 14, 2023.
[2] The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.
