Rwanda plans to narrow its budget gap to 2.3 percent of gross domestic product in the year through June 2012 on increased donor grants and tax revenue said Fred Quarshie, an adviser to the Minister of Finance and Economic Planning.
The shortfall will shrink from 4.2 percent in the current fiscal year, Quarshie said by phone yesterday.
The deficit before grants will narrow to 13.7 percent of GDP from 15 percent, Quarshie said. Grants to the government will increase 19 percent to 444.7 billion Rwandan francs ($743 million), while tax revenue is expected to rise by 57.7 billion francs to 501.4 billion.
Spending will increase to 1.12 trillion francs from 984 billion, according to a statement from the Ministry of Finance.
However, Inflation rate fell from 5.9 percent in December 2009 to 0.2 percent in December 2010, the lowest in the region.
The Finance Minister said the government was monitoring the inflation rate that started to rise in 2011 before taking appropriate measures as it is expected to be highly affected by oil and food prices on global markets.
The level of imports was lower than projected in 2010 due to delays in implementation of strategic investment projects.
Certainly, the surplus of Balance of Payments helped the country to increase external reserves to US$814.2 million, enough to cover 5.4 months of imported goods and services. The full budget 2011/2012 will be presented to parliament later today. Some parts of the story were borrowed from Bloomberg news agency
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