IMF revises Rwanda's growth forecast to 6.5 percent

The International Monetary Fund revised on Saturday its forecast for Rwanda's economic growth to 6.5 percent in 2010, from a previous 5.4 percent, and said it expected another 6.5 percent expansion this year. "Real GDP growth is projected at 6.5-7.0 percent in 2011-12, similar to the outlook in the region and higher than the growth projections for sub-Saharan Africa as a whole," the IMF said in a statement.
Growth would be driven by government investment, recovery in exports and higher private sector credit, the IMF said of one of Africa's fastest growing economies. Inflation is expected to quicken to 6.0 percent in 2011 from an estimated 4.6 percent at the end of 2010. The current account deficit is seen widening to 9 percent this year because of imports for hefty investments.
Downside risks lie in a slow pickup in external demand and credit to the private sector, the IMF said. Rwanda maintained an expansionary fiscal policy for its 2010/2011 financial year, after committing a package equal to 2 percent of GDP in the previous year, but would gradually unwind the stimulus, the IMF said. The overall deficit widened to 13.8 percent of GDP in the current fiscal year ending in June, after Treasury committed to a stimulus package worth 0.5 percent of its GDP.