Rwanda

This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile The recovering services sector and policy reforms will support strong growth. High indebtedness, inflation, and rising external imbalances heighten fiscal and external vulnerabilities. --Real GDP per capita will average 4.7% per year in 2023-2026, well above the rate for similarly rated peers. --The government?s fiscal deficit and financing needs remain large and are increasing interest-service costs, albeit from low levels. --Strong services sector activity and elevated government investment should drive growth, although erratic weather, particularly the floods in May 2023, could prevent a stronger rebound. --We expect further currency weakness due to the low supply of foreign currency in the domestic market, sizable

...Rwanda's ability to access relatively cheap concessional financing from multilateral and bilateral lenders supports the government-led investment plan and continues to drive economic growth. We expect this government-led growth model to continue, but public debt and external imbalances are rising due to heightened financing needs and rising import demand. Policies will remain centered on improving infrastructure and will increasingly focus on tackling climate change risks while ensuring fiscal consolidation. These policies are supported by a 36-month IMF Policy Coordination Instrument and a $319 million Resilience and Sustainability Facility (RSF), both approved in December 2022. However, Rwanda's political...

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