Rwanda says it may miss target of 6.6 percent growth rate for 2013

Rwanda says it is likely to miss its 2013 economic growth forecast of 6.6 percent after the performance of the service sector fell short of expectations due to the effects of aid cuts from the prior year. The country’s finance ministry released a document on Wednesday indicating that growth, for the year, was likely to fall below 6 percent.

The landlocked east African nation of about 10 million people suffered from a decrease in budgetary support by donors in 2012 after receiving accusations by the United Nations of backing rebels in the neighboring Democratic Republic of Congo. Those cuts caused the government to curb its spending, resulting in limited average growth for the services sector in the first three quarters to 4.6 percent, down from 12.2 percent in all of 2012.

“This moderate performance was due to cuts in government expenditures and slowdown in credit distribution to the private sector,” the ministry said. The industrial sector maintained its growth during the period, growing by an average of 11.6 percent in the first three quarters, the finance ministry said, without giving the comparative growth rate for the previous period.

All aid was resumed in 2013 in some form at least, with some aid that was direct budgetary support going into program support. it was also stated that growth forecasts for 2014 are likely due next month. Furthermore, inflation was likely to be stable at around 5 percent this year on the back of projected good production of food and stable oil prices in global markets, the ministry said. The rate fell to 2.4 percent in the year to January

Source: The Africa Report