2018年-IMF国际货币组织全球_Rwanda_Ninth_Review_Under_the_Policy_Support_Instrument_69页_4mb

Rwanda: Ninth Review Under the Policy Support Instrument

Core Content Summary

The International Monetary Fund (IMF) completed the ninth review of Rwanda's performance under the Policy Support Instrument (PSI) in June 2018. The review highlights Rwanda's strong macroeconomic performance and progress in implementing its program, while also outlining future policy directions and economic outlook.

Main Points

• Economic Growth: Rwanda's 2017 growth was higher than expected at 6.1%, driven by agriculture, industry, and services. Construction was the only sector that underperformed. The growth rebounded significantly in the fourth quarter of 2017, reaching 10.5% year-on-year.
• Inflation Control: Inflation remained subdued in 2017 and early 2018, with headline inflation at 1.7% in April 2018. It is expected to remain below the 5% target in the short term and gradually approach it over the medium term.
• External Balances: The current account deficit was reduced from 14.9% of GDP in 2016 to 6.8% in 2017, supported by exchange rate adjustments and structural reforms. Foreign exchange reserves improved, reaching 4.2 months of next year's projected imports by end-2017.
• Program Performance: All quantitative targets and structural benchmarks were met, except for an indicative target on new external debt contracted by public enterprises. The PSI-supported program has been very satisfactory, contributing to macroeconomic stability and growth.
• Fiscal Policy: The fiscal stance remains unchanged, with a focus on balancing growth and Sustainable Development Goals (SDGs) achievement with medium-term debt and external sustainability. Efforts are ongoing to improve domestic revenue mobilization and fiscal transparency.
• Monetary Policy: The central bank maintains a neutral stance, given low inflation expectations and uncertain domestic demand recovery. A transition to an interest rate-based monetary policy framework is progressing.
• Future Outlook: The economic outlook for 2018-2020 shows growth revisions upward, with projections of 7.2%, 7.8%, and 8.0% respectively. The Vision 2050 aims to place Rwanda in upper middle-income status by 2035, supported by seven-year National Strategies for Transformation (NSTs) and sectoral strategies aligned with SDGs.
• Key Sectors: Agriculture, industry, and services are expected to drive growth. Agricultural productivity is improving through irrigation and seed production, while the industry sector benefits from mining, construction, and the establishment of new Special Economic Zones (SEZs) and infrastructure projects.
• Debt and Risk: The risk of debt distress remains low. However, Rwanda's economy is still vulnerable to regional shocks, pests, and weather-related issues, which could affect growth and stability.

Key Information

• PSI Overview: The PSI was approved in 2013 and extended until December 1, 2018.
• Growth Drivers: The 2017 growth rebound was supported by strong export performance (up 58%) and improved domestic production.
• Export Performance: Traditional and non-traditional exports, such as coffee, tea, minerals, and new products like gemstones and processed foods, contributed to export growth.
• Fiscal Performance: The budget deficit for FY17/18 was slightly lower than projected, and the fiscal stance for FY18/19 remains unchanged.
• Monetary Policy: The central bank kept the policy rate unchanged in Q1 2018, citing a stronger growth outlook and sufficient liquidity in the banking sector.
• Public Debt: Total public debt, including guarantees, was 48.3% of GDP in 2017, with external debt at 37.5%.
• Financial Sector: The banking sector remains well capitalized, with capital adequacy ratios above regulatory minimums. Nonperforming loans (NPLs) remained steady, but profitability has declined.

Structural Reforms and Future Engagement

• The authorities are interested in successor program engagement with the IMF, and discussions are ongoing regarding the focus, timing, and mode of the new program.
• The PSI has supported Rwanda's efforts to address external imbalances and promote private-sector-led growth through macroeconomic stability and structural reforms.
• The government's "Vision 2050" is underpinned by the NSTs, aiming for economic transformation and alignment with SDGs.

Economic Outlook and Risks

• Growth is expected to remain strong over the medium term, supported by public and private investments.
• Risks include regional political developments, pests affecting harvests, and unpredictable weather. However, public investments in pest control and irrigation are expected to improve resilience in the agriculture sector.

Conclusion

The ninth PSI review for Rwanda was completed successfully, with the country on track to meet all program targets and benchmarks. The government's commitment to fiscal discipline, monetary stability, and structural reforms has supported macroeconomic resilience and growth. Future success will depend on continued efforts to improve domestic revenue collection, maintain a neutral monetary policy, and implement the NSTs to achieve the Vision 2050 goals.