Rwanda’s real gross domestic product (GDP) growth accelerated to 7.8% y/y in the third quarter from 6.1% y/y in Q2, growing at the fastest pace since Q4 2012, data from the National Institute of Statistics of Rwanda (NISR) showed. The improvement can be attributed to a recovery of exports coupled with a slowdown in imports.

Rwanda’s exports rose 2.7% y/y in Q3 following a 5.1% y/y contraction in Q2, while the y/y growth in imports slowed to 5.5% from 11.7%. At the same time, growth in total consumption decelerated to 8.1% from 9.1% with both government and household spending slowing down, and growth in investments eased to 7.5% from 11% due to lower gross fixed capital formation.

Private final consumption expenditure accounted for 75% of GDP in Q3, up from 71% in Q2, while the share of government consumption fell to 15% from 19%. Gross capital formation is estimated at 25% of GDP, down from 27% in Q2, while the negative contribution of net exports improved to -15% from -16%.

By industry, the agriculture sector grew 6% y/y in Q3, speeding from a 5% increase in Q2, and contributed 1.8pp to the overall GDP growth (1.4pp in Q2). The services sector increased by 10% y/y, quickening from a 9% expansion in Q2 and contributed 5.0pp (4.2pps in Q2). On the other hand, industry expanded by 4% y/y, slowing from a 5% growth in Q2, and contributed 0.7pp (0.7pp in Q2).

The small East African country’s GDP at current market prices was estimated at RWF1.393trn ($2bn) up from RWF1.314trn in Q2. The services sector contributed 47% to GDP, followed by the agriculture sector, which accounted for 34% and the industry sector, which contributed 14%. The balance of 5% was attributed to adjustment for taxes and subsidies on products.

Rwanda’s central bank has forecast GDP growth to accelerate to 6.0% this year from 4.7% in 2013.  Last year’s growth was the lowest since 2003, hampered by aid suspensions in H2 2012, which resulted in delays in budget expenditures. The World Bank has forecast a 5.7% growth for this year and the International Monetary Fund (IMF) has predicted a 6.0% expansion.