The country’s gross domestic product (GDP) grew by 7.4 per cent in first quarter 2014 from 4.7 per cent last year.
“The rebound in economic growth in the first quarter was stronger than expected so it is positive news. This was partly due to a rebound in agricultural production which can be quite volatile and there could be a bit of reversal in these remaining quarters of the year,” Mark Bohlund, senior economist at IHS told CNBC Africa.
The growth was also spurred by expansion in services and industrial sectors indicating the strengthening of private consumptions.
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“The industrial and the service sector are more reliable indicators to a more sustainable growth. There was an acceleration of growth in both of these sectors. Consumption fell to a three and a half low in May and that supports private consumption which causes the drive of service sector growth,” Bohlund explained.
According to the Rwanda’s National Institute of Statistics, the industry sector grew nine per cent and the services sector grew 8 per cent during the first quarter of this year.
This growth indicates that the country may recover faster than expected from the slowdown in economic growth in 2013. Rwanda’s impressive GDP growth has often approximately been 8 per cent.
“Rwanda should continue to boost their business environment as this is paying off in increased foreign investments,” Bohlund said.
According to Bohlund, if Rwanda is to return to the growth rates of about 8 per cent, the country needs to convince investors that the unrest is an issue of the past. Recently, the East African country was battling with forces from the Democratic Republic of Congo at its border.
Rwanda recently got backing on a renewed commitment by the World Bank to scale up its support to its Economic Development and Poverty Reduction Strategy over the next four years. This commitment will see the country receive between 200 million US dollars and 250 million US dollars extra funding per year to aid the country’s economic growth.