Rwanda’s economy expanded by 9.2 percent in the first quarter of this year compared to the same period in 2022, due to a strong rebound in the service sector, government statistics show.
A strong recovery in the MICE (meetings, incentives, conferences, and exhibitions/events) saw the services sector contribute 44 percent of the GDP, according to the National Institute of Statistics data released on Monday.
Rwanda will next month host a global event – the Women Deliver 2023 Conference (WD2023) from July 17-20. At least 6,000 delegates are expected in person and 200,000+ people online. Kigali will also host the World Travel and Tourism Council Global Summit in November.
Separate figures by the banking regulator National Bank of Rwanda show improvement in economic activity overall in the three months to March 2023.
The Composite Index of Economic Activities (CIEA) used to predict the direction of economic movements in future months increased by 14.4 percent in the first quarter, year-on-year.
“The good economic performance in 2023 Q1 was mainly driven by the continuous robust recovery of the tourism industry as well as the improvement of trade (+10.7 percent) and telecommunication (+25.9 percent) services. Tourism-related services like hotels and restaurants as well as transport saw a continuous increase of their turnovers, recording 54.6 percent and 8.9 percent, respectively,” the central bank said in its May economic update.
Lingering shocks
While the latest figure reflects a strong economic recovery, there are lingering shocks that could undermine the performance of the economy this year.
The economy is expected to slow to 6.2 percent in 2023, compared to 8.2 percent in 2022.
According to the International Monetary Fund (IMF), the outlook is subject to high uncertainty, mainly stemming from the risks of deepening geopolitical fragmentation, volatility in global energy and fertiliser prices, a steeper-than-projected decline in trading partners’ growth and a funding squeeze.
“The costs of humanitarian response and reconstruction following the recent floods will generate further spending needs,” said IMF in a statement last month.
Last week during the budget presentation, Finance minister Uzziel Ndagijimana pointed out that economic prospects could be undermined by drought or a decrease in global commodity prices that may affect the country’s export prices.
