Inflation to stand at 3.2 percent at end of year – IMF

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m_Inflation to stand at 3

Rwanda’s inflation rate is expected to stand at 3.2 percent at the end of this year, the International Monetary Fund said on Monday, urging the government to reduce the costs of energy and transport to facilitate growth.

General inflation, both rural and urban, stood at 3.3 percent in August, official data showed.

Paulo Drummond, the deputy division chief in the African Department of the IMF, said the economy was expected to expand by 6 percent this year, in line with the government’s forecast.

“For the Rwandan economy to grow and for the private sector to be leading the growth in Rwanda it would be very important that the costs of businesses come down,” Drummond told a news conference after a visit to the country.

He said costs of electricity, labour, transport and finance were holding back businesses while access to finance was also a problem.

Business people agreed with the IMF’s assessment on the cost of doing business in the country.

“The electricity cost is affecting our business. We have to contain the cost. And one of the things we are concerned about is the unpredictability of the electricity price,” said a factory owner who did not wish to be named.

Finance Minister Claver Gatete told the same news conference the government was focusing on new railway links as well as electricity generation plants in order to lower the costs of doing business.

Rwanda could also import electricity from countries in the region like Ethiopia and Uganda to make up for any power generation shortfalls at home, the minister added.

 

About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

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