Rwanda Economic Growth to Slow to 7.7%
Tag: Rwanda Economic, Rwanda Economic growth
Summary: Rwanda’s economic growth will decline to 7.7 percent this year from 8.6 percent last year as a slowdown in Europe curbs tourism and falling commodity prices reduce revenue, Finance Minister John Rw…
Tourism is the largest source of foreign currency for the East African nation, accounting for about $200 million each year, Rwangombwa said in an interview yesterday in Addis Ababa, Ethiopia, where he is attending the World Economic Forum on Africa.
The UBS Bloomberg index of commodities that tracks prices of everything from metals to crops declined 10 percent in the past year. Arabica coffee has dropped 34 percent.
Rwanda’s economic growth will decline to 7.7 percent this year from 8.6 percent last year as a slowdown in Europe curbs tourism and falling commodity prices reduce revenue, Finance Minister John Rwangombwa said.
“It is mainly about world economic shocks and how tourism will be affected,” he said. “Commodity prices are affecting our exports.”
Rwanda, which went through a genocide that left 800,000 people dead in 1994, is aiming to draw more foreign direct investment as it seeks to reduce its dependence on commodity exports.
The economy of the exporter of coffee and tea has expanded an average of 8.4 percent annually in the five-year period that ended in 2011, according to the United Nations.
The central bank has room to leave interest rates on hold as the inflation rate should stay below 10 percent this year, Rwangombwa said. Inflation accelerated to 8.2 percent in March from 7.9 percent in February.
The Bank of Rwanda raised its key lending rate by 50 basis points, or 0.5 percentage point, to 7.5 percent on May 4. It was the first increase in six months.