Rwanda’s economy on upward curve

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Rwanda’s economy on upward curve

Rwanda’s economy grew by 7.8 percent in the third quarter of 2014 according to the financial stability report; this follows an increase of 7.5 and 6.1 percent in the first and second quarters of 2014, respectively.

The service sector, which has the largest share of GDP, outperformed other sectors with growth of ten percent, while agriculture recorded 6 percent growth. The industry sector registered four percent growth.

After a slowdown in real GDP growth in 2013, Rwanda’s economy is recovering steadily. Supported by accommodative monetary policy and good performance in the agriculture sector, Rwanda’s economy continued to perform well in the fourth quarter of 2014.

The Composite Indicator of Economic Activities and total turnovers for the first two months of 20l4 grew by 12.3% against 3% and 12.2% from 5.4% in the same period of 2013 respectively.

In the first eleven months of 2014, total exports increased by 4.9% in value and 5.4% in volume, while imports increased by 8.5% in value and 3.9% in volume. As a result, the trade deficit for the same period widened by 10.2% and import coverage dropped to 25.1% in 2014 from 26.0% in 2013.

With informal cross border trade included, exports covered 29.3% of imports against 30.7%.Rwanda’s good economic performance has been supported by the improvement in economic financing.

Between December 2013 and November 2014, money supply rose by 18.0% compared to 12.4% recorded in the same period of 2013 and 14.3% initially projected. During the same period, credit to the private sector increased by 18.1% against 11.3% recorded in the same period of 2013 and 16.l% projected. New authorized loans grew by 42.2% in the first eleven months of 2014 amounting to Rwf 595.6 billion – against a decline of 8.3% in the same period of 2013.

According to the financial stability report, the service sector performance was boosted by information and communication, which registered 25% growth. Agriculture production continued to perform well in season B (boosted by food crops that grew at 7%) while negative growth (-5 percent) in manufacturing contributed to the reduced growth in the industry sector.

High growth sectors include information and communication technology, which grew by 25 percent, mining, which grew by 22 percent, and real estate activities, which grew by 14 percent. Food crops with a share of 24 percent, trade activities with 12 percent and construction with seven percent were among the sectors with highest shares in contributing to Rwanda’s economic growth in the third quarter of 2014.

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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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