Rwanda’s economy is projected to grow to seven per cent in 2024, up from 6.3 per cent in 2023, ranking first in East Africa and third among African countries with high economic growth prospects.

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This is detailed in the latest United Nations ‘World Economic Situation and Prospects 2024,’ report that predicts slower global economic growth to 2.4 percent in 2024 from 2.7 percent in 2023.

The UN flagship economic report anticipates a sombre economic outlook for the near term with persistently high-interest rates, further escalation of conflicts, sluggish international trade, and increasing climate disasters, which pose significant challenges to global growth.

The UN Secretary-General António Guterres, noted: "2024 must be the year when we break out of this quagmire. By unlocking big, bold investments we can drive sustainable development and climate action, and put the global economy on a stronger growth path for all.”

While external conditions are projected to remain unfavourable for the African economies due to a weak global economic outlook and limited external financing opportunities, the report says GDP growth in Africa is forecasted to register moderate improvement in 2024, increasing to 3.5 per cent on average.

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Overall, East Africa is projected to experience economic growth of 5.5 per cent in 2024, up from five per cent in 2023. This is while inflation is expected to slow down from 13.5 per cent in 2023 to 10.5 per cent in 2024 and 8.5 per cent in 2025.

Among the top ten African countries expected to register high economic growth in 2024, according to the report, Rwanda comes third after Libya and Senegal with 7.6 and 9.2 per cent, respectively.

It further highlights that in East Africa, the country’s prospective leading economic performance in 2024 will be followed by DR Congo, Uganda, and Tanzania.

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Economic growth as a measure of Gross Domestic Product (GDP) takes into account the total market value of all the finished goods and services produced within a country in a specific period and is a scorecard of a country’s economic health.

This means that these economies are expected to have more activities in manufacturing industries, infrastructure projects, agriculture, services, imports, and exports, among others.

Inflation projections

Consumer prices, which have remained challenging for most developing countries in the past two years, will ease down in 2024 and 2025, however, subject to geopolitical environment and climate conditions.

Li Junhua, United Nations Under-Secretary-General for Economic and Social Affairs, said the persistent high inflation has further reduced progress in poverty eradication, with especially severe impacts in the least developed countries.

"It is imperative that we strengthen global cooperation and the multilateral trading system, reform development finance, address debt challenges, and scale up climate financing to help vulnerable countries accelerate towards sustainable and inclusive growth.”

It is estimated that Rwanda’s inflationary, averaging 14.7 per cent in 2023, will decelerate to 7.2 per cent in 2024 and 5.4 per cent in 2025.

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Data from the National Institute of Statistics Rwanda (NISR) indicate that the increase of consumer prices on Rwanda’s market has eased, reaching 9.2 per cent in November 2023, the first time inflation has fallen below double digits in the year.

However, figures for the average inflation in 2023 are yet to be released.

While the high consumer prices are mainly driven by poor agriculture performance across seasons over the past two consecutive years and imported inflation from external markets, the National Bank of Rwanda targets it to go back within an acceptable rate of between two per cent and eight per cent in 2024.