{Rwanda’s economic growth will be faster-than-expected this year and accelerate further in 2015 as low interest rates help spur investment by private industry, central bank Chief Economist Thomas Kigabo said. }
The economy is forecast to expand 7 percent next year from 6.8 percent in 2014, up from an earlier projection of 6 percent, Kigabo said in an interview in the capital, Kigali. Annual inflation is expected to remain below 5 percent next year helped by sliding prices for oil, he said today.
“Looking at the external factors that affect the economy we see less pressure next year,” he said. “The recovery of the global economy, the falling of fuel prices on the international market, we don’t see any pressures” on inflation, he said.
Policy makers in the East African nation lowered the central bank’s benchmark interest rate for the first in a year in June, cutting it by half a percentage point to 6.5 percent, where it was held at the last meeting in September. Rwanda, a $7.5 billion economy of 12 million people, relies on farming of crops including tea and coffee to generate about a third of its gross domestic product and 70 percent of export earnings.
Rwandan urban inflation accelerated to 0.5 percent in October from 0.2 percent in September. The inflation rate this year is unlikely to exceed 3 percent, said Kigabo.
Monetary policy will remain “accommodative” as long as inflation pressures are contained, Bank of Rwanda Governor John Rwangombwa said on Aug. 28.
{{Bloomberg}}
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