Rwanda’s economy grew 7.7% in H1 2023

Rwanda’s economy experienced a significant growth rate of 7.7 per cent in the first half of 2023, largely driven by the robust performance of the services and industry sectors, according to the latest assessment by the National Bank of Rwanda. The country's Central Bank Governor, John Rwangombwa, discussed the monetary policy statement, highlighting various aspects of the economy. While services and industry saw impressive growth rates of 11.3 per cent and 7.5 per cent, respectively, the agriculture sector continued to struggle. Rwangombwa expressed concerns about the poor performance of agriculture, attributing it to unfavorable weather conditions for the second consecutive year. He noted that agriculture only grew by a mere 0.3 per cent in the first half of the year, impacting inflation negatively. Despite the challenges in the sector, the overall domestic economy showed resilience, led by a strong recovery in services and the industry sector. The tourism industry, in particular, played a significant role in driving growth, with a notable increase in service exports and foreign direct investments. Remittances also continued to rise, providing additional foreign exchange resources for the country. However, Rwanda faced a trade deficit increase of 23.3 per cent in the first half of the year, leading to pressure on the foreign exchange market. This resulted in a depreciation of the national currency against the US dollar, with inflation reaching 12 per cent. Rwangombwa reassured that despite the current challenges, Rwanda maintained strong reserves, equivalent to 4.4 months of imports by the end of June. He expects the exchange rate pressure to gradually ease next year after persisting throughout the remainder of 2023.