Rwanda's trade deficit widened by 30.9 per cent year-on-year, reaching $411.6 million in June this year from $314.5 million in June 2023, according to the latest data from the National Institute of Statistics of Rwanda (NISR).
A trade deficit occurs when a country's imports exceed its exports.
On month-by-month basis, the trade gap increased by 13.7 per cent from $362 million in May to the current $411.6 million.
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In June 2024, the value of domestic exports decreased by 21.2 per cent compared to May 2024 and by 0.2 percent compared to the similar period last year, the data shows.
The value from exports to Rwanda’s leading export market, the United Arab Emirates (UAE), slightly dropped by 0.04 per cent in June to $107.68 million, while value of Rwanda’s goods to China declined by 0.03 per cent to $9.33 million.
However, the value from Rwanda’s exports to Luxembourg and the United States slightly grew on an annual basis by 4.08 per cent to $4.55 million, and 2.85 per cent to $3.53 million, respectively.
On the other hand, the value of imports in June increased by 0.13 per cent compared to May 2024 and by 18.4per cent compared to June 2023.
In June, Rwanda imported mainly from China, Kenya, India, UAE, and Tanzania. The country imported goods worth $135.22 million from China, $130.44 million from Kenya, and $67.38 million from India, and $43.81 million from UAE.
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Analysts attribute the continuous growth in Rwanda's trade deficit to an inflated import bill, following a depreciation of the Rwandan franc against the US dollar and other major currencies.
The trade deficit is expected to widen even further as the franc continues to depreciate against the dollar.
According to BNR, the Rwandan franc depreciated by 9.3 percent year-on-year against a weighted average of the currencies of its main trading partners as of the end of March 2024, compared to a 2.3 percent depreciation recorded in March 2023.