Economic Outline

Economic Indicators

Rwanda registered a good economic performance over the last years, and thanks to investments in education and infrastructure, it reached the Millennium development goals, although macroeconomic imbalances have intensified. Throughout the late-1990s and sustained by reforms and ongoing donor assistance, growth gained momentum. It remained consistent, averaging 8.5% annually from 1995 to 2022. Significant enhancements in living standards ensued. However, after a robust rebound from the pandemic, real GDP expansion slowed to 6.2% in 2023. This deceleration was attributed to a widespread moderation across the services and manufacturing industries, alongside adverse weather conditions adversely affecting the agriculture sector. Despite the acceleration of post-disaster reconstruction spending and the recovery in the agricultural sector, real GDP growth is anticipated to moderate in the short term. This projection is based on expected policy measures aimed at supporting external balance and price stability. According to the IMF, growth is forecasted to reach 7% both this year and in 2025.

In FY22/23, the fiscal deficit stood at 7.3% of GDP. Projections indicate that the current account deficit will expand to 11.5% of GDP in 2023 and further to 11.8% of GDP in 2024. This widening is attributed to factors such as increased food imports, efforts for post-flood reconstruction, and the extensive airport construction project. Nevertheless, a steady enhancement in the current account is anticipated over the medium-term. This improvement will be bolstered by higher domestic savings resulting from policy adjustments (IMF). The debt-to-GDP ratio was estimated at 63.3% in 2023, with an upward trajectory expected over the forecast horizon (73.7% by 2025, IMF). Inflation was high in 2023 (14.5%), but should decrease to 6% this year and around 5% in 2025 (IMF).

According to the IMF, as of August 2023, the unemployment rate persisted at a high 18%, surpassing pre-pandemic levels. Particularly elevated rates were observed among females and the youth, standing at 21.9% and 21%, respectively. The disparity between male and female unemployment rates can be partially attributed to the limited employment prospects for women during periods of sluggish agricultural activity. Rwanda as a low GDP per capita, estimated at USD 2,793 in 2022 by the World Bank (PPP).

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