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Rwanda’s economy is projected to shrink by 0.2% this year, but will rebound strongly next year to grow by 5.7%, according to the International Monetary Fund (IMF).
The IMF said an economic recovery was underway but warned that spending to contain the effects of COVID-19 pandemic would raise public debt.
“As a result, fiscal deficit is expected at 8.5 percent of GDP in FY2020/21, with public debt projected at 67 percent of GDP at end-2020,” it said.
The east African nation’s economy grew 9.4% last year but has been hurt by COVID-19 as the country adopted stringent measures.
That has led to various sectors registering a significant drop in production and consumption of services despite ongoing efforts by the government to revamp the economy.
Rwanda’s economy contracted by 3.6% in the third quarter, the statistics office said on Tuesday. While from July to September, the second quarter, the GDP dropped by 12.4% compared to the same period in the previous year, partly due to the prolonged impact of the total lockdown imposed in March for almost two months.
“The decline in GDP of Q2 was due to poor performance in transport, trade, education, construction, exports, hotels, restaurants and agriculture subsectors,” said Mr Uzziel Ndagijimana, Rwanda’s Minister of Finance and Economic Planning.
The Agriculture sector that contributes over 30 percent to GDP, dropped by 2 per cent in the second quarter of 2020 compared to the same quarter in 2019, “due to impact of climate related disasters of 2019 which affected Season A 2020,” Mr Ndagijimana said.
Since the start of the pandemic, Rwanda has registered a total of 6,954 confirmed cases of COVID-19 with 57 deaths.