Economic Outline

Economic Indicators

From 2014 to 2023, Rwanda's GDP per capita grew at an average rate of 4.3% per year. However, this growth has been largely driven by public investment, supported by external aid, which has not led to sufficient job creation or significant improvements in productivity and poverty reduction. The economy grew by 8.9% in 2024, up from an average of 8.2% in 2022-2023, driven by strong private consumption—fueled by the creation of nearly half a million jobs, particularly in rural areas—and solid investment. On the supply side, growth was led by continued expansion in services (+10%), industry, and a recovery in food production. Furthermore, private consumption grew by 4.2% in 2024, driven by improved labour market conditions and lower inflation. Public consumption rose by 14.8%, while investment surged by 16.0%, up from a slight decline of -0.2% in 2023, mainly due to strong construction activity. Looking ahead, real GDP is expected to grow at an average of 7.1% from 2025 to 2027, fueled by continued growth in agriculture, services, and industry (data from the World Bank).

Rwanda’s fiscal position improved in the first half of FY2024/25, driven by higher tax collections and fiscal consolidation efforts. Revenue reached 21.9% of GDP, up 1.5 percentage points from the previous year, largely due to the increased use of Electronic Billing Machines (EBM). On the expenditure side, total outlays were 26.7% of GDP, in line with the budget, reflecting efforts to streamline spending. Consequently, the fiscal deficit narrowed to 4.8% of GDP, with the primary balance deficit reducing to 2.8% of GDP. The government is focused on fiscal consolidation, cutting costs through reduced official travel, virtual meetings, and expanding public services digitalization. It is also improving public investment management and revenue administration to broaden the tax base. Public debt, estimated at 78.8% of GDP in 2024 by the World Bank, is projected to peak at 86.4% in 2026 before gradually declining. Meanwhile, inflation eased to 4.8% in 2024, down from over 13% in the previous two years, driven by lower food prices, easing global inflation, and monetary tightening. However, core inflation remained high due to rising transport costs after the removal of government subsidies. The banking sector stayed stable, with private sector credit growing by 20.3%, non-performing loans at 5%, and banks maintaining strong liquidity and capitalization, as seen in a liquidity coverage ratio of 305.9% and a capital adequacy ratio of 22.8%, well above regulatory thresholds.

According to the World Bank, Rwanda's labour market improved in 2024, with unemployment falling to 14.9% and labour force participation rising to 62.3%, although gender and urban-rural disparities remain. Using the international poverty line of USD 2.15/day in 2017 PPPs, poverty in Rwanda was estimated at 47.6% in 2024. Rwanda has a low GDP per capita, estimated at USD 3,814 in 2024 by the IMF (PPP).

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