IMF Executive Board Approves an Additional US$111.06 Million Disbursement to Rwanda to Address the COVID-19 Pandemic
IMF News, June 11, 2020
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- Published: June 11, 2020
Economic impact and outlook
- 2020 GDP growth forecast revised from 5.1 percent to 2.0 percent due to the deepening COVID-19 impact.
- Pandemic effects highlighted:
- Weaker domestic demand.
- Losses of revenue.
- Sharp decline in exports and remittances.
- Unprecedented spending needs generated by the pandemic placing significant pressure on public finances and the balance of payments.
- The additional RCF resources are intended to alleviate pressing financing needs and support Rwanda’s Economic Recovery Plan.
- Note: Further support from the international community is identified as necessary.
IMF assessment and policy recommendations (statement by Mr. Tao Zhang, Deputy Managing Director and Acting Chair)
- Assessment:
- “The COVID-19 pandemic continues to severely impact the Rwandan economy. The global and domestic macroeconomic outlook has further deteriorated. Growth projections have been revised down, and revenue losses and spending needs are more than twice the size estimated at the time of the first RCF request.”
- Endorsed measures:
- “The policy measures deployed by the authorities to respond to the pandemic and accelerate economic recovery are appropriate.”
- Additional fiscal spending should be:
- Well-targeted and cost-effective.
- Designed so as not to crowd-out other priority areas.
- Additional financing from the international community is “critical to ease the adjustment burden.”
- Authorities’ commitment to high standards of transparency and accountability in managing emergency financial assistance is “welcome.”
- Monetary and financial sector guidance:
- Maintain data-driven monetary policy.
- Continue to provide liquidity support to cushion pandemic impact.
- Step up supervision to safeguard financial stability.
- Medium-term fiscal guidance:
- “Once the crisis abates, it will be critical to adopt a credible fiscal adjustment path to maintain debt sustainability in the medium-term and preserve Rwanda’s development gains over the last two decades.”
IMF press release, June 11, 2020.
