Rwanda’s growth eased to an estimated 6.5 percent in the 2009/10 year and the government estimates expansion of 7.6 percent for the year starting July, a government document showed.
“From the outset, the fiscal year 2009/10 was expected to be a testing one … it was soon evident that Rwanda would not escape the effects of the global financial crisis,” Rwanda said in a Budget Framework Paper that added growth in 2008/09 was 8.6 percent.
Growth was less than expected, despite growth in agricultural output, of 7.1% from similar expansion in the previous year.
“Current estimates for real GDP growth 2009/10 are in the range of 6.5 percent, largely fuelled by agriculture…where output is expected to grow by 7.1 percent. This is testament to the success of the CropIntensification Program, which has seen yields increase in key products such as maize and cassava.”
The country and its economy also faced the transition to full EAC (East African Community) membership, which presented opportunities and challenges, the paper said.
Rwanda, alongside Kenya, Tanzania, Uganda and Burundi, belong to EAC, whose common market is due to come into force in July. The five have a combined GDP of $73.3 billion.
The government expects inflation to rise in the short term because of expanding economic activity, with the headline figure seen at 7.2% by the end of the 2010/11 fiscal year.
The BFP projected revenue and grants will rise to 825.3 billion Rwandan francs in the fiscal year starting July and total expenditure and net lending growing to 953.6 billion and deficit of 135.7 billion.
Rwanda projects it will have 393.5 billion francs in revenue and 394.5 billion in grants by the end of this fiscal year and to spend a total 849 billion and deficit of 77.8 billion.
Pic: President Paul Kagame of Rwanda