The International Monetary Fund is set to lower Rwanda’s 2017 economic growth projection to 5.2 per cent, from 6.2 per cent.
“We are discussing the revision downward because growth was modest in the first half of the year,” IMF mission in Rwanda chief Laura Redifffer said.
Last year, the country registered 5.9 per cent growth.
Among the factors leading to the revision are a prolonged drought in 2016, and a slowdown in construction.
“It was hard to have construction grow like it did last year. This factor as well as external factors affected the growth rate in the first half of the year,” Ms Rediffer said.
The IMF had projected the 6.2 per cent growth based on agricultural recovery and increased exports.
Rwanda’s economy grew by 4 per cent year-on-year in the second quarter of 2017, slower than the 7.5 per cent growth registered last year.
“We expect growth to pick up in the second half of the year, but we still have to get the average of the year as whole,” Ms Rediffer said.
In September, the World Bank estimated Rwanda’s growth at between 4.6 per cent and 6.2 per cent.
“The impact of drought on agriculture, which affected the last quarter of 2016 and the first quarter of 2017, will be an issue,” World Bank senior economist for Rwanda Aghassi Mkrtchyan said.
At 5.2 per cent, Rwanda would still be ahead of most economies in sub-Saharan Africa including neighbours Kenya and Uganda, whose growth projections were revised downwards recently.
Kenya’s 5.3 per cent growth estimate, issued in April, was revised to 5 per cent in October on account of a severe drought that affected harvests as well as a politically charged environment.
IMF projects that sub-Saharan Africa will grow economically at an average rate of 2.7 per cent in 2017, up from 1.4 per cent in 2016.