Rwanda’s GDP to grow by 7%

KIGALI – Rwanda’s economy is expected to grow by seven per cent in 2007 compared with six per cent last year due to improved agricultural production, the country’s finance minister said on Friday.

“The second quarter has seen impressive results in agriculture. All these point to a GDP growth of about seven per cent for this year,” Finance and Economic Planning Minister James Musoni told Reuters in an interview, adding that the service and industry sectors had also improved.In May, the central bank governor had projected that Rwanda’s economy would grow by 6,5 per cent in 2007.Musoni said inflation in the second quarter of 2007 had eased to eight per cent from 10 per cent in the first quarter, due to improved agricultural output.Monetary management by the central bank also contributed to lowering inflation pressure, according to Musoni.Under its ambitious plan dubbed ‘Vision 2020’, the tiny nation seeks to transform itself into a middle-income economy by increasing annual per capita income from US$260 to US$900 and cut huge poverty levels by 2020.However, analysts say growth could be hampered by poor coffee output, expected to decline by 30 per cent during 2007.A report released on Thursday by the United Nations Development Programme said Rwanda’s progress could be significantly compromised by insufficient agricultural investment, high population growth and unequal income distribution.The nation’s expenditure would increase to 600 billion Rwandan francs (US$1,1 billion) in 2008, from 520 billion Rwandan francs (US$954 million) in 2007, Musoni said.He will unveil his budget for 2008 in the first week of October.It is largely financed by western donors.Musoni said the government intended to increase infrastructure expenditure in the 2008 financial year to improve roads, healthcare and education.”We need to invest heavily in basic infrastructure like the road network, health and education infrastructure and also double investment going to the agricultural sector,” he said.”We plan to push the percentage of public investments from the current seven per cent of GDP to 10 per cent GDP.”The Rwandan government has struggled to rebuild the economy, which was shattered by the 1994 genocide that claimed the lives of an estimated 800 000 Tutsi and Hutu moderates.Nampa-ReutersAll these point to a GDP growth of about seven per cent for this year,” Finance and Economic Planning Minister James Musoni told Reuters in an interview, adding that the service and industry sectors had also improved.In May, the central bank governor had projected that Rwanda’s economy would grow by 6,5 per cent in 2007.Musoni said inflation in the second quarter of 2007 had eased to eight per cent from 10 per cent in the first quarter, due to improved agricultural output.Monetary management by the central bank also contributed to lowering inflation pressure, according to Musoni.Under its ambitious plan dubbed ‘Vision 2020’, the tiny nation seeks to transform itself into a middle-income economy by increasing annual per capita income from US$260 to US$900 and cut huge poverty levels by 2020.However, analysts say growth could be hampered by poor coffee output, expected to decline by 30 per cent during 2007.A report released on Thursday by the United Nations Development Programme said Rwanda’s progress could be significantly compromised by insufficient agricultural investment, high population growth and unequal income distribution.The nation’s expenditure would increase to 600 billion Rwandan francs (US$1,1 billion) in 2008, from 520 billion Rwandan francs (US$954 million) in 2007, Musoni said.He will unveil his budget for 2008 in the first week of October.It is largely financed by western donors.Musoni said the government intended to increase infrastructure expenditure in the 2008 financial year to improve roads, healthcare and education.”We need to invest heavily in basic infrastructure like the road network, health and education infrastructure and also double investment going to the agricultural sector,” he said.”We plan to push the percentage of public investments from the current seven per cent of GDP to 10 per cent GDP.”The Rwandan government has struggled to rebuild the economy, which was shattered by the 1994 genocide that claimed the lives of an estimated 800 000 Tutsi and Hutu moderates.Nampa-Reuters