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.
|y/y change at constant 2011 prices||Q3 2014||Q2 2014||Q1 2014||Q4 2013||Q3 2013|
|By kind of activity|
|Agriculture, forestry and fishing||6%||5%||5%||-1%||1%|
|Taxes less subsidies on products||7%||-3%||6%||11%||-12%|
|Total final consumption expenditure||8.1%||9.1%||8.4%||8.2%||-0.4%|
|-- households and NGOs||5.1%||5.4%||6.3%||8.2%||-1.2%|
|Gross capital formation||7.5%||11.0%||8.1%||1.3%||1.8%|
|-- gross fixed capital formation||7.0%||11.0%||7.7%||1.6%||1.9%|
|-- change in inventories||32.9%||11.7%||19.6%||-6.8%||-4.9%|
|Exports of goods and services||2.7%||-5.1%||13.0%||8.5%||13.7%|
|Imports of goods and services||5.5%||11.7%||13.0%||15.1%||-1.5%|
|Source: National Institute of Statistics of Rwanda|
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