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 |
| Total GDP | 7.8% | 6.1% | 7.5% | 4.2% | 2.9% |
| By kind of activity | |||||
| Agriculture, forestry and fishing | 6% | 5% | 5% | -1% | 1% |
| Industry | 4% | 5% | 9% | 3% | 9% |
| Services | 10% | 9% | 9% | 7% | 4% |
| Taxes less subsidies on products | 7% | -3% | 6% | 11% | -12% |
| By expenditure | |||||
| Total final consumption expenditure | 8.1% | 9.1% | 8.4% | 8.2% | -0.4% |
| -- government | 25.8% | 26.2% | 20.2% | 8.0% | 4.7% |
| -- 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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