{
  "title": "IMF Executive Board Completes Third Review Under the Policy Coordination Instrument (PCI) for Rwanda",
  "publication": "IMF News, December 16, 2020",
  "sourceUrl": "https://www.imf.org/en/news/articles/2020/12/16/pr20376-rwanda-imf-executive-board-completes-third-review-under-the-pci",
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  "summary": "The Executive Board concluded the third review of Rwanda’s program supported by the IMF’s Policy Consultation Instrument (PCI) on December 16, 2020.",
  "publishDate": "2020-12-16",
  "sections": [
    {
      "heading": "Overview and Program Context",
      "content": "- The Executive Board concluded the third review of Rwanda’s program supported by the IMF’s Policy Consultation Instrument (PCI) on December 16, 2020.\n- The PCI program was approved on June 28, 2019 to support the implementation of Rwanda’s National Strategy for Transformation (NST).\n- The PCI expires in June 2022 and remains appropriate to balance sustaining the economic recovery and maintaining fiscal responsibility."
    },
    {
      "heading": "Economic outlook and recent performance",
      "content": "- Real GDP contracted by 4.4 percent year-on-year in the first half of 2020.\n- Real GDP is projected to be slightly negative at -0.2 percent in 2020 and rebound to 5.7 percent in 2021.\n- Recovery momentum followed the end of the full lockdown in the second half of 2020.\n- Headline projections and selected price indicators from Table 1:\n  - Real GDP: 2019: 8.5; 2020: -0.2; 2021: 5.7; 2022: 6.8; 2023: 7.5.\n  - GDP deflator: 2019: 1.8; 2020: 5.6; 2021: 1.0; 2022: 2.3; 2023: 4.3.\n  - CPI (period average): 2019: 2.4; 2020: 5.4; 2021: 6.9; 2022: 2.5; 2023: 4.1."
    },
    {
      "heading": "Policy response to COVID-19 and fiscal outcomes",
      "content": "- Authorities adopted early stringent containment measures and implemented a large policy package to support households, businesses, healthcare spending, and banking system liquidity.\n- Fiscal impacts and projections:\n  - Fiscal deficit is expected at 8.5 percent of GDP in FY2020/21.\n  - Public debt projected at 67 percent of GDP at end-2020 (statement in text).\n- Fiscal aggregates from Table 1 (selected):\n  - Total revenue and grants: 2019: 23.6; 2020: 20.1; 2021: 20.6; 2022: 23.2; 2023: 23.8; 2024: 23.9; 2025: 23.3.\n  - Of which: tax revenue: 2019: 16.6; 2020: 16.9; 2021: 16.5; 2022: 15.6; 2023: 15.9.\n  - Expenditure: 2019: 31.9; 2020: 29.0; 2021: 31.7; 2022: 27.2; 2023: 30.2; 2024: 28.3.\n  - Current expenditure: 2019: 14.5; 2020: 14.6; 2021: 15.8; 2022: 13.9; 2023: 13.4.\n  - Capital expenditure: 2019: 12.7; 2020: 12.9; 2021: 11.9; 2022: 10.9.\n  - Primary balance: 2019: -6.9; 2020: -4.2; 2021: -9.9; 2022: -6.0; 2023: -5.2; 2024: -3.0; 2025: -2.0.\n  - Overall balance: 2019: -12.7; 2020: -10.0; 2021: -16.2; 2022: -13.5; 2023: -10.2; 2024: -12.2; 2025: -11.5."
    },
    {
      "heading": "Debt dynamics and risks",
      "content": "- Public debt and related indicators from Table 1:\n  - Total public debt incl. guarantees: 2019: 59.0; 2020: 58.1; 2021: 68.1; 2022: 75.7; 2023: 71.1; 2024: 76.3; 2025: 73.7.\n  - Of which: external public debt: 2019: 46.0; 2020: 45.4; 2021: 55.0; 2022: 61.9; 2023: 58.4; 2024: 63.0; 2025: 60.7.\n  - PV of total public debt incl. guarantees: 2019: 44.5; 2020: 43.1; 2021: 45.5; 2022: 52.5; 2023: 48.8; 2024: 50.6; 2025: 50.9.\n- The Executive Board and staff highlighted the critical need to monitor and contain fiscal risks including from state-owned enterprises and state-guaranteed loans."
    },
    {
      "heading": "Monetary and financial sector conditions",
      "content": "- Monetary policy stance and financial measures:\n  - Monetary policy has been accommodative.\n  - Temporary extraordinary measures provided liquidity to the banking sector.\n  - Emphasis on data-driven monetary policy going forward and close monitoring of credit and liquidity risks, including from loan restructuring, to safeguard financial stability.\n- Selected monetary and credit indicators from Table 1:\n  - Broad money (M3) growth rates: 2019: 21.8; 2020: 21.9; 2021: 11.3; 2022: 22.3; 2023: 12.0; 2024: 16.1; 2025: 13.6.\n  - Reserve money: 2019: 21.5; 2020: 22.1; 2021: 12.1; 2022: 21.4; 2023: 11.2; 2024: 20.3; 2025: 19.8.\n  - Credit to non-government sector: 2019: 17.6; 2020: 14.8; 2021: 14.1; 2022: 10.3; 2023: 11.4; 2024: 14.0; 2025: 13.7.\n  - M3/GDP (percent): 2019: 27.9; 2020: 29.8; 2021: 27.0; 2022: 28.9; 2023: 28.0; 2024: 29.6; 2025: 28.5."
    },
    {
      "heading": "External sector and reserves",
      "content": "- External sector indicators from Table 1:\n  - Exports (goods and services): 2019: 13.1; 2020: 21.2; 2021: 26.8; 2022: 27.7.\n  - Imports (goods and services): 2019: 34.9; 2020: 34.1; 2021: 34.4; 2022: 33.8.\n  - Current account balance (incl grants): 2019: -12.4; 2020: -10.5; 2021: -11.4; 2022: -8.4.\n  - Gross international reserves (In millions of US$): 2019: 1,367; 2020: 1,553; 2021: 1,643; 2022: 1,461; 2023: 1,463; 2024: 1,598; 2025: 1,556; 2024/alternate: 1,834 (table entries reflect multiple year columns)."
    },
    {
      "heading": "Structural reforms and medium-term priorities",
      "content": "- Immediate policy priorities have shifted toward crisis response, but the PCI’s objectives remain focused on:\n  - Accelerating transition to private sector-led growth in the post-pandemic period given limited fiscal space.\n  - Continuing structural reforms to promote private sector-led and inclusive growth.\n  - Strengthening governance, fiscal transparency, and risk management.\n  - Improving tax compliance.\n  - Further strengthening the interest rate-based monetary policy framework.\n- The crisis has affected progress on structural reforms; renewed efforts to push ahead with reforms are recommended."
    },
    {
      "heading": "Executive Board / Staff recommendations and guidance",
      "content": "- Key recommendations and guidance from Mr. Tao Zhang (Deputy Managing Director and Acting Chair):\n  - Ensure strong reporting and procurement practices to guarantee effectiveness and oversight of crisis-related spending.\n  - Pursue sound contingency planning and fiscal risk management given the uncertain outlook.\n  - To preserve fiscal space, reprioritize spending and seek additional concessional financing should the outlook deteriorate further.\n  - Closely monitor fiscal risks from state-owned enterprises and state-guaranteed loans.\n  - Keep monetary policy data driven and monitor credit and liquidity risks, including from loan restructuring.\n  - Adopt a credible and growth-friendly fiscal consolidation strategy after the crisis abates to preserve debt sustainability while supporting the nascent recovery.\n    - The strategy should center on measures to re-ignite domestic revenue mobilization, streamline non-priority spending, and re-prioritize public investment.\n    - Such measures could be announced and legislated before the end of the program to support their credibility.\n\nSource: IMF Press Release No. 20/376, “IMF Executive Board Completes Third Review Under the Policy Coordination Instrument (PCI) for Rwanda,” December 16, 2020.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Rwanda and the IMF\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2020/12/16/pr20376-rwanda-imf-executive-board-completes-third-review-under-the-pci"
    }
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    "Published: December 16, 2020",
    "The Executive Board concluded the third review of Rwanda’s program supported by the IMF’s Policy Consultation Instrument (PCI) on December 16, 2020.",
    "The PCI program was approved on June 28, 2019 to support the implementation of Rwanda’s National Strategy for Transformation (NST).",
    "The PCI expires in June 2022 and remains appropriate to balance sustaining the economic recovery and maintaining fiscal responsibility.",
    "Real GDP contracted by 4.4 percent year-on-year in the first half of 2020.",
    "Real GDP is projected to be slightly negative at -0.2 percent in 2020 and rebound to 5.7 percent in 2021.",
    "Recovery momentum followed the end of the full lockdown in the second half of 2020.",
    "Headline projections and selected price indicators from Table 1:",
    "Authorities adopted early stringent containment measures and implemented a large policy package to support households, businesses, healthcare spending, and banking system liquidity.",
    "Fiscal impacts and projections:",
    "Fiscal aggregates from Table 1 (selected):",
    "Public debt and related indicators from Table 1:",
    "The Executive Board and staff highlighted the critical need to monitor and contain fiscal risks including from state-owned enterprises and state-guaranteed loans.",
    "Monetary policy stance and financial measures:",
    "Selected monetary and credit indicators from Table 1:",
    "External sector indicators from Table 1:",
    "Immediate policy priorities have shifted toward crisis response, but the PCI’s objectives remain focused on:",
    "The crisis has affected progress on structural reforms; renewed efforts to push ahead with reforms are recommended.",
    "Key recommendations and guidance from Mr. Tao Zhang (Deputy Managing Director and Acting Chair):",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Rwanda and the IMF](http://www.imf.org/external/country/RWA/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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