Rwanda revises inflation expectations for 2025 to 5.8%

Rwanda's economic landscape for the year 2025 is facing adjustments in its inflation projections, with the National Bank of Rwanda revising its expectations to 5.8 per cent. The Chief Economist, Thierry Kalisa, highlighted the impact of global economic slowdown and efforts to curb inflation rates worldwide. Despite the positive trend of decreasing inflation and commodity prices globally, Rwanda is bracing for a potential rise in food inflation due to climate change effects on harvests. Delayed rainfall at the onset of the planting season has led to concerns about reduced food production and subsequent price pressures. However, the overall inflation forecast remains within the two to eight per cent range. The Monetary Policy Committee (MPC) decided to maintain the interest rate at 6.5 per cent, anticipating future developments. Kalisa also pointed out geopolitical risks, especially tensions in regions like Russia, Ukraine, and the Middle East, which could impact international commodity prices. Despite these challenges, Rwanda's economy has shown resilience in 2024, with robust growth across various sectors. Services, including trade, finance, ICT, and tourism-related services, have been significant drivers of economic expansion. The industry sector, particularly construction and manufacturing, has also performed well. While the agricultural sector experienced a mix of exceptional and moderate seasons in 2024, concerns loom for the 2025 season due to climate-related uncertainties. Nonetheless, the medium-term outlook projects steady economic growth rates close to 7 per cent for 2025 and 2026.