Kigali: Rwanda’s economic growth reached 8.4 percent in the first quarter of 2019, reaffirming the country’s steady economic growth registered since the second half of 2017, with an average real GDP rate of 8.8 percent, Central Bank Governor, John Rwangombwa said on Thursday.
Governor Rwangombwa made the statement as he presented the second Monetary Policy and Financial Stability Statement.
Rwanda’s total exports receipts increased by 7.5 percent (to USD 577.8 million in 2019H1 from USD 537.3 million) in 2018H1, while its volume increased by 58.1 percent, Rwangombwa said.
“In line with the Made in Rwanda program, the growing share of non-traditional exports is mainly driven by increased domestic production of milling industry, flowers, other minerals, cement, mattresses, milk products, textiles, as well as iron and steel” Governor Rwangombwa noted.
Headline inflation eased to 0.7% in 2019H1, from 1.8% recorded during 2018H1, though it increased to 0.9% in June 2019, from 0.0% in the previous month. The decline in headline inflation was mainly reflected in food, and energy deflation.
The financial system also continues to grow and remains dominated by banks, according to the Central Bank.
The banking sector accounted for 66.3 percent total financial system’s assets as at end June 2019. The balance sheet of the banking sector continued to expand, growth happened across the major components of banks’ assets: loans (+17.6%), government securities (+13.3%), cash and reserves at NBR (+ 35.8%) and other investments (+43.3%). The share of loans in banks’ assets increased from 57.7 percent in June 2018 to 58.8 percent in June 2019.
Non-performing loans ratio of banks, steadily dropped since September 2017 and continued to slow down during the first half of 2019, reflecting improved economic performance.
The balance sheet of the microfinance sub-sector continued to expand during the year ended June 2019, with the total assets increasing by FRW 34 billion.
The total assets of the insurance sector increased by FRW 54.3 billion to FRW 477.3 billion (i.e.1.8 percent of GDP).
During the year to end June 2019, the electronic retail payments continued to gain momentum, with the number of POS transactions increasing by 40 percent, while the value of POS transactions increased by 18 percent.
Way forward
In 2019, Rwanda’s real economy is expected to continue performing well (currently projected at around 7.8%), despite the global economic growth projected to slow down from 3.6 percent in 2018 to 3.2 percent in 2019 due to intensified us-china trade war and prolonged uncertainties around Brexit.
The financial sector is also expected to remain sound and stable while the uptake of cashless or electronic payment is expected to pick-up as a result of awareness campaign and the forthcoming interoperability initiative. (End)