Rwanda’s economy expanded by 7.3 per cent in real terms buoyed by growth in services and agricultural sectors in the first quarter of 2016, slowing slightly from 7.6 per cent recorded for the same period last year, data from the statistics office show.

The GDP in constant price increased by 7.3 per cent, surging from $1.6 billion in first quarter of 2015 to $1.7 billion over the corresponding period this year after the statistics body factored out the impact of inflation.

At the current market price, GDP increased by 10.9 per cent first increasing by $193 million, from $1.76 billion to in first quarter 2015 before settling at $1.95 billion the same period this year.

However, the economy is forecast to grow by 6 per cent this year due to external pressures arising from low global commodity prices, a firming dollar against the Rwandan franc, and an economic slowdown in Europe and China.

According to the International Monetary Fund (IMF), Rwanda is projected to record 6 per cent growth in the next two years, slowing down from 6.9 per cent registered in 2015, before picking up in 2018.

“The services continue to lead in terms of shares to GDP with 46 per cent compared to 33 per cent and 15 per cent for agriculture and industry respectively,” said Yusuf Murangwa, the director-general at the National Institute of Statistics.

The services sector growth in the first quarter was driven by a vibrant wholesale and retail sector as consumption trends in Rwanda and neighbouring Democratic Republic of Congo (DRC) increased. Rwanda is a leading exporter of merchandise to eastern DRC.

The agriculture sector also picked up in the same period growing slightly to 7 per cent from 5 per cent in the first quarter last year on increased coffee and tea exports.

“The agriculture sector growth was mainly driven by increasing exports which grew 86 per cent mainly boosted by coffee and tea,” Mr Murangwa said.

Analysts however predict a drop in agricultural exports due to prolonged dry spell expected from June to October, which may affect disposable incomes as majority of Rwandans are in the agricultural sector.

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