The International Monetary Fund (IMF) Executive Board has concluded the fifth review under the Policy Coordination Instrument (PCI) for Rwanda. The IMF reported that Rwanda's economy grew by 8.9 percent in 2024, spurred by a recovery in agriculture and continued strength in services and construction sectors. Inflation stayed within the National Bank of Rwanda’s target range due to tight monetary policy and improved domestic food supply.
However, the current account deficit widened last year because of strong imports of consumer and capital goods, although reserves remained adequate at 4.7 months of imports by year-end. Looking ahead, fiscal pressures are anticipated from significant infrastructure investments such as the New Kigali International Airport and RwandAir expansion, alongside recent pension reforms. Public debt is expected to peak in fiscal year 2025/26, with projections indicating that the PCI debt anchor will be reached by 2033.
To ensure long-term fiscal sustainability, accelerating domestic revenue mobilization and maintaining a credible fiscal consolidation path are essential. Risks from state-owned enterprises (SOEs), rising debt service costs, and limited access to concessional financing need careful management.
Monetary policy should remain data-driven to control inflation and support external adjustments. Exchange rate flexibility will be crucial for absorbing shocks while continuing reforms to strengthen foreign exchange market functioning. Oversight of credit expansion, especially in microfinance sectors, along with improved monitoring of large exposures is important for financial stability.
Program implementation under the PCI remains robust as all quantitative targets were met and most structural benchmarks completed. However, two structural benchmarks—the Cabinet approval of a comprehensive tax policy package and the rollout of the Global Master Repurchase Agreement—were delayed but eventually implemented.
Deputy Managing Director Mr. Bo Li stated: “Rwanda’s economy has demonstrated impressive resilience, recording strong growth supported by robust activity in the services, construction, and agriculture sectors." He noted that "sustaining fiscal consolidation remains vital" while emphasizing that "monetary and financial policies remain focused on stability."
Rwanda continues its progress on climate-related reforms including efforts to implement a climate budget tagging system, develop green taxonomies, and advance climate finance initiatives.