Economy to grow by 7.6% - BNR

Rwanda’s economy is projected to grow at a rate 7.6 percent in 2012 with a balancing act to maintain inflation at low levels, Claver Gatete, the Governor of the Rwandan National Bank (BNR) revealed. The economy grew at 8.8 percent in 2011.This year, government wants to contain inflation at a single digit not exceeding 7.5 percent despite possible fallouts from a weak global economy. As of December 2011, inflation was at 8.3 percent. “The risks still exist. It is important to be aware of the reality. Keep a close eye on the situation and where necessary, tighten the monetary policy,” noted Gatete, during the presentation of monetary policy statement yesterday. He added that the move will help to strike a balance between building the economy as well as containing inflation and interest rates.In a similar move to contain the impact of persistent risks of inflationary pressure, credit to private sector is estimated to grow at 16.6 percent dropping from 28.4 recorded last year.Total new authorised loans by commercial banks and Rwanda Development Bank accounted for Rwf 336 billion up by 28 percent during 2011.According to the monetary statement, agriculture has sustained great performance in the last three years with 9.5 percent increase of harvest in season A and B of 2011, compared to the previous year.“We have seen agriculture performing very well because of heavy investment by the government, especially in the crop intensification programme,” Gatete said.In 2011, the industry sector had grown the fastest, 15 percent, led by construction 22.3 percent mining 15 percent and manufacturing, 6.8 percent.The service sector followed with 7.2 percent boosted by business environment which significantly improved, especially finance and insurance sectors , which registered an increase of 10.3 percent followed by transport and communication at 5.6 percent growth while wholesale and retail trade grew by 4.9 percent.Makonnen Negatu, AfDB’s country representative, wanted to know Rwanda’s magic to contain inflation. Gatete responded that the magic was the close coordination between the government, Central bank and the International Monetary Fund (IMF).Rwanda managed to keep inflation low unlike in other East African countries. Figures from the Central bank indicate that as of December, Uganda was at 27 percent, Kenya 18.9 percent, Tanzania at 19.8 while Burundi was at 14.9 percent.