IMF Staff Country Reports

Supported by a large policy package, Rwanda’s economy rebounded in 2021 after contracting in the preceding year due to the COVID-19 shock. However, the country now faces multi-faceted challenges—pandemic scars, headwinds from the war in Ukraine, and climate-related shocks, meanwhile inflationary pressures have increased markedly. Downside risks are significant from the war spillovers, through further pressures on energy, food, and fertilizer prices, global financial tightening, and slowdown in major trading partners, in addition to climate-related shocks. Against this backdrop, the authorities have requested a new Policy Coordination Instrument (PCI) and an arrangement under the Resilience and Sustainability Facility (RSF) to support their efforts in maintaining macroeconomic stability, advancing their reform agenda, including on climate to enhance Rwanda’s resilience to climate-related shocks, and insuring against downside risks. They will cancel the current PCI (expiring in June 2023) upon approval of the new PCI.