Despite a cyclical weakening in agriculture, Rwanda’s economy has continued to perform well and economic growth reached 6 percent, , the International Monetary Fund (IMF) has said. It added that it was mainly fuelled by a robust expansion of the construction and services sectors.

"After a peak in early 2007, inflation declined and remained in single digits through the end of the year," the organization said in a statement.

An IMF mission led by Zuzana Murgasova, visited Kigali between March 5-18 to review the economic performance under the country’ three-year Poverty Reduction and Growth Facility (PRGF) arrangement with the IMF and discussed the economic programme for 2008.

"The policy performance under the PRGF-supported programme was satisfactory in 2007. The fiscal programme was broadly on track, although the end-year target on net credit to government was missed due to a delay in disbursements of donor funds," reads the report in part.

"While the reserve money target was met, the conduct of monetary policy was challenging as fiscal spending accelerated in the second half of the year," it added.

The economic programme for 2008 is in line with the ‘authorities’ medium-term policy framework, defined in the Economic Development and Poverty Reduction Strategy Paper (EDPRS).

The programme aims to address impediments to growth and poverty reduction while preserving macroeconomic stability.

IMF said that main challenge was to maintain macroeconomic stability and low inflation in light of increasing international prices, higher transport costs of imported goods, and scaling up of fiscal spending.

To preserve external debt sustainability, IMF said, borrowing for large-scale infrastructure projects in the priority sectors needs to be carefully evaluated.

"We welcome the authorities’ decision to develop a debt management strategy to guide future borrowing and prevent a re-accumulation of unsustainable debt."

The mission hailed the progress in implementation of broad-based structural reforms, particularly in the areas of tax administration, public financial management and in the financial sector It also welcomed the authorities’ continued commitment to pursue these reforms in the future.

In the coming weeks, the government and IMF staff will pursue further discussions on some few remaining program-related issues.

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