## IMF Executive Board Completes Fourth Review Under the Policy Coordination Instrument (PCI) and Request of an Extension of the Policy Coordination Instrument for Rwanda

_IMF News, July 6, 2021_

## Source details

**Canonical URL:** [IMF Executive Board Completes Fourth Review Under the Policy Coordination Instrument (PCI) and Request of an Extension of the Policy Coordination Instrument for Rwanda](https://www.imf.org/en/news/articles/2021/07/06/pr21206-rwanda-imf-executive-board-completes-fourth-review-under-pci-request-extension-pci)

## Other formats

- [Markdown version](/en/news/articles/2021/07/06/pr21206-rwanda-imf-executive-board-completes-fourth-review-under-pci-request-extension-pci/index.md)
- [Structured JSON version](/en/news/articles/2021/07/06/pr21206-rwanda-imf-executive-board-completes-fourth-review-under-pci-request-extension-pci/index.json)
- [Bundle manifest](/en/news/articles/2021/07/06/pr21206-rwanda-imf-executive-board-completes-fourth-review-under-pci-request-extension-pci/bundle-manifest.json)

## Bibliographic details
- Published: July 6, 2021

---

### Outlook and key macroeconomic projections
- Real GDP contracted by 3.4 percent in 2020.
- Real GDP is projected to rebound by 5.1 percent in 2021.
- Growth is expected to return to its pre-pandemic trend by end-2023.
- The outlook remains uncertain due to the protracted impact of the pandemic and uncertainty on adequate vaccine availability.

### PCI status and program context
- The Policy Coordination Instrument (PCI) was approved on June 28, 2019.
- The Executive Board completed the Fourth Review under the PCI on July 1, 2021 and approved a one-year extension of the PCI.
- The authorities requested a one-year extension of the PCI, which was initially set to expire on June 15, 2022.
- The PCI provides a policy anchor for the next phase of the authorities’ COVID-19 response and for supporting a strong and inclusive recovery.

### Policy response and near-term priorities
- Authorities’ response focuses on: procuring vaccines, increasing fiscal support for households and businesses, and providing sufficient liquidity to the banking system.
- To accommodate additional spending needs, authorities have relaxed fiscal program targets while enhancing efforts to contain fiscal risks and adopting gradual fiscal consolidation once the crisis abates.
- The program has shifted priorities in response to COVID-19 to support the economy and people through the crisis.

### Balance between recovery and fiscal sustainability
- Given the protracted nature of the pandemic, an increase in the fiscal deficit should allow the authorities to accommodate further spending to cushion the impact of COVID-19.
- Rising debt levels necessitate balancing recovery efforts with safeguarding fiscal sustainability.
- The authorities are encouraged to contain fiscal risks from SOEs, PPPs, and state-guaranteed loans to support a growth-friendly fiscal consolidation once the crisis abates and gradually bring debt towards the authorities’ 65 percent of GDP target.

### Financial sector and monetary policy guidance
- Containing financial sector vulnerabilities is key to safeguarding financial stability.
- Recommended actions include intensified monitoring of credit risk, prudent restructuring, timely recognition of problem loans, and continued data-driven monetary policy with monitoring of price developments.
- Monetary policy has been accommodative to help keep the banking sector liquid and support borrowing.

### Structural reforms and inclusive recovery priorities
- Maintain momentum on structural reforms for an inclusive recovery, with attention to limiting the pandemic’s impact on women and children and advancing the Sustainable Development Goals.
- Continue strengthening fiscal transparency, domestic revenue mobilization, and the monetary policy framework.
- Measures to deepen financial markets, improve education and health care, sustain expansion of digital payments, and further financial inclusion should support transition to private sector-led growth.

*Source: Press Release No. 21/206, IMF Executive Board Completes Fourth Review Under the Policy Coordination Instrument (PCI) and Request of an Extension of the Policy Coordination Instrument for Rwanda (July 6, 2021).*

---


## References

- [Tao Zhang](https://www.imf.org/en/About/senior-officials/Bios/tao-zhang)
- [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)

_Source: https://www.imf.org/en/news/articles/2021/07/06/pr21206-rwanda-imf-executive-board-completes-fourth-review-under-pci-request-extension-pci_