Rwanda Economic Update, July 2012 : Leveraging Regional Integration
Rwanda grew at a rapid rate in the second half of 2011, exceeding 10 percent for the first time, since the 2009 global economic downturn. Overall, Rwanda achieved 8.6 percent growth in 2011, and substantially exceeded the average growth for Sub- Sa...
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Kigali
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/899241468108265340/Leveraging-regional-integration http://hdl.handle.net/10986/26691 |
| Summary: | Rwanda grew at a rapid rate in the
second half of 2011, exceeding 10 percent for the first
time, since the 2009 global economic downturn. Overall,
Rwanda achieved 8.6 percent growth in 2011, and
substantially exceeded the average growth for Sub- Saharan
Africa (SSA) of 5.0 percent. Rwanda also grew fastest than
all the countries in the East African Community (EAC), which
as a group reached 6.1 percent in 2011. Robust growth
continued in the first quarter of 2012, when Rwanda's
economy expanded at 7.7 percent. Renewed concerns over the
global growth outlook and of the European debt crisis, might
negatively affect Rwanda's prospects in 2012/2013, and
lead to a lower growth turn-out compared to 2011. First
quarter growth in 2012 remained overall robust, but showed
considerable weakness in the industry sector. This was in
contrast to what was observed in the second half of 2011,
when industrial growth led by buoyant construction, and
mining activities pushed the sector to the top, ahead of
services. In the second half of 2011, Rwanda's growth
momentum accelerated largely led by thriving non-tradable
goods and services sectors while the manufacturing sector
continued to be sluggish. The Rwandan economy expanded by
10.8 percent during the second half of 2011, but
manufacturing only contributed 0.5 percentage points to this
growth outcome. Agricultural output took a leap in the
second half, mainly due to a very good second harvest season
outcome. Overall, growth turn-out for 2011 stood at 8.6
percent, up from 7.2 percent in 2010. Inflationary pressures
reappeared in tandem with high international food and fuel
prices. The small policy response came with a delay, not
enough to prevent core inflation reaching its highest level
since mid-2009. Core inflation exceeded headline inflation
for the whole second half of 2011. The current account
deficit broadened in 2011. Rwanda's export performed
robustly, benefiting from high international prices, but
could not keep up with the increasing import bill, leading
to a further deterioration in the trade balance. For 2012,
Rwanda's economy is expected to continue to grow slower
than it did in 2011, but at a healthy pace. The industrial
sector is likely to expand less than in 2011 and growth in
the services sector is expected to be more moderate, both on
account of a more risky global environment. |
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