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Rwanda Business Forecast Report Q1 2014

Rwanda's economic growth set to accelerate to 7.5% in 2014

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2014-03-17 07:21:04 - Rwanda Business Forecast Report Q1 2014 - a new country guide report on

Rwanda´s decision to abandon its support for the M23 rebels is a positive sign that Kigali prioritises ties with key foreign donors over maintaining its historical influence in the eastern Democratic Republic of the Congo. We expect that the decision to cut support was controversial within the Rwandan Patriotic Front government, and believe that intra-regime tensions may rise.

We believe that real GDP growth will accelerate to 7.5% in 2014, and remain high over the duration of our 10-year forecast period. We stress, however, that low government revenues and a state-driven economic model leaves Rwanda highly dependent on foreign aid.

Rwanda´s current account deficit will increase slightly in 2014 owing to high import demand, but we expect the country´s trade shortfall to



gradually decline over the course of our forecast period as export earnings grow and the economy develops.

We have reduced our 2013 real GDP growth estimate from 7.5% to 6.8% following lower-than-expected government spending.

Political risks remain high, and another dispute with foreign donors could have a highly damaging effect on Rwanda´s economy.

Rwanda´s heavily agricultural economy remains highly dependent on weather conditions; a poor harvest would depress incomes and slow economic growth.

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