Rwanda GDP grows by 10.6% in 2018 quarter one

Presenting the Monetary Policy and Financial Stability Statement (MPFSS) of the first half of 2018 on Thursday, Central Bank Governor John Rwangombwa said the performance was driven by the 12.0% growth in the service sector, 8.0% in agriculture and industry’s 7.0% growth.

The Composite Index of Economic Activity increased by 15.4% from 7.8% registered in the same period of 2017.

The country’s formal trade deficit reduced by 2.0% in the first half of 2018 compared to the corresponding period of 2017.

Formal exports increased by 23.2% in the first half of 2018. In the same period, non-traditional exports increased by 19.1%.

Governor Rwangombwa said that Rwanda’s financial system remains safe and sound, pointing at the profits increase among banks, micro-finance institutions (MFIs) and insurance companies in the first half of 2018 compared to the first half of 2017.

As of June 2018, the Capital Adequacy Ratio (CAR) stood at 21.4% for banks and 32.5% for MFIs compared to the 15% prudential benchmark.

Banking sector Liquidity Coverage Ratio stood at 299.5% in June 2018, compared to the 100% prudential requirement. The liquidity ratio of MFIs stood at 103% in June 2018, compared to the 30 percent prudential limit.

The solvency position of private insurers increased to 149% in June 2018 compared to 61% registered in June 2017.

Non Performing Loan ratio in banks dropped to 6.9% from 8.2% in June 2017. The ration in MFIs reduced from 12.3% to 8%.

Financial sector profits, combining banks, MFIs and insurance, increased from Rwf40.2 billion in June 2017 to Rwf50.6 billion in June 2018.

The banking sector profits increased from Rwf21.5 billion to Rwf22.9 billion.

The MFI sector rebounded from a loss of Rwf118 million in the first half of 2017 to a profit of Rwf3.3 billion in the first half of 2018.

The insurance sector profits increased from Rwf18.6 billion in the first half of 2017 to Rwf24.5 billion in the first half of 2018.

Rwangombwa said exchange rate pressures remain moderate. By end of June 2018, Rwandan franc depreciated by 1.7% against the US dollar. The depreciation is predicted at 4.0% maximum by end of December while the inflation is projected not to exceed the medium term objective of 5%.

Central Bank Governor presents Monetary Policy and Financial Stability Statement twice a year to highlight updates on economic and financial developments and future prospects thereof.