Rwandan Finance Minister Claver Gatete said falling oil prices are positive for the East African nation’s economy and may help keep the rate of inflation low.
The economy expanded 7.8 percent in the third quarter and is projected to grow more than 6 percent for the entire year, Gatete told reporters today in the capital, Kigali. He said in October expansion is targeted to exceed 7 percent in 2015.
“We expect to have positive growth next year,” he said.
The landlocked nation imports all of the oil products that are used locally. Oil purchases account for 25 percent of the country’s total import bill and consumption of petroleum products, now at 5,600 barrels a day, is growing 10 percent a year, according to the Rwanda Utilities Regulatory Authority.
Oil prices have slumped about 45 percent this year as shale supplies have boosted U.S. output. Signs of recovery in the American economy and the absence of any major foreseeable risks are giving more reason for optimism about Rwanda’s economy, said Gatete.
Rwanda’s inflation rate, which is the lowest in the five-nation East African Community, rose to 0.7 percent in November from 0.5 percent in October.
Rwanda is transforming its debt market with more sales of local securities after its debut $400 million international bond last year. The country plans to sell seven-year to 10-year bonds every quarter of the financial year through June 2015 to help develop its capital markets, the government said in a letter to the International Monetary Fund published on Dec. 12.
The Rwandan government’s economic outlook is more optimistic than the IMF, which projects growth of 6 percent this year and next, accelerating to 7 percent in 2016.
Source: Bloomberg
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