{
  "title": "IMF Staff Concludes Visit to Rwanda",
  "publication": "IMF News, April 5, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/04/05/pr22105-rwanda-imf-staff-concludes-visit-to-rwanda",
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  "summary": "IMF mission led by Haimanot Teferra held meetings with Rwandan authorities during March 21 – April 5, 2022 to discuss the sixth review under the Policy Coordination Instrument (PCI).",
  "publishDate": "2022-04-05",
  "sections": [
    {
      "heading": "Mission purpose, timing, and status",
      "content": "- IMF mission led by Haimanot Teferra held meetings with Rwandan authorities during March 21 – April 5, 2022 to discuss the sixth review under the Policy Coordination Instrument (PCI).\n- Staff made significant progress toward a staff level agreement needed to complete the sixth review under the PCI; the agreement is subject to approval by IMF Management and Executive Board.\n- Consideration by the Board is tentatively scheduled for the second half of June 2022.\n- Follow-up discussions will be needed over the coming weeks given the unusual economic uncertainty following the war in Ukraine."
    },
    {
      "heading": "Key economic outcomes and indicators",
      "content": "- Real GDP: contraction of 3.4 percent in 2020 followed by rebound of 10.9 percent in 2021.\n- Inflation: picked up to 5.8 percent in February 2022.\n- Central bank policy rate: raised by 50 basis points to 5 percent.\n- Reserves: remaining comfortably above 4 months of prospective imports levels at end-2021.\n- Fiscal performance: fiscal performance in the first half of FY 21/22 was in line with expectations.\n- Financial stability: financial sector stability has been maintained; the banking system remains well-capitalized and liquid.\n- Credit risk: non-performing loans remain low, but credit risk continues to be elevated following the expiry of forbearance measures."
    },
    {
      "heading": "Outlook, risks, and projected revisions",
      "content": "- The outlook is clouded by the impact of the war in Ukraine and related uncertainties, which is likely to put the economy under strain.\n- Staff will revise growth projections down relative to the previous review, with risks tilted to the downside.\n- Higher global energy and commodity prices are expected to:\n  - fuel inflationary pressure,\n  - widen the current account deficit further this year,\n  - weigh on Rwanda’s economic recovery through deterioration in external conditions, including weaker-than-expected recovery in trading partners.\n- Rwanda’s medium-term outlook, while uncertain, remains favorable, supported by the authorities’ commitment to sustainability of public finances and debt and continued structural reforms."
    },
    {
      "heading": "Immediate policy priorities and recommendations",
      "content": "- Preserve fiscal and financial stability and mitigate the impact of the external shock on the most vulnerable.\n- If further support to affected groups or activities is warranted, such support should be:\n  - temporary,\n  - targeted,\n  - transparent,\n  - accommodated by reprioritizing current and capital spending to avoid significant budget slippages and preserve debt sustainability.\n- Continue reforms to:\n  - enhance revenue mobilization,\n  - strengthen fiscal transparency,\n  - strengthen risk management.\n- National Bank of Rwanda (BNR) recommendations:\n  - Stand ready to take appropriate action calibrated to evolving domestic and external economic conditions.\n  - Take appropriate action to contain second-round effects of higher imported prices on inflation while also considering the evolving outlook for growth.\n  - Allow exchange rate flexibility to mitigate the impact of rising oil and food prices on the current account and safeguard reserves.\n  - Limit interventions in the foreign exchange market to minimize excessive exchange rate volatility.\n- Financial sector vigilance:\n  - Continue intensive monitoring of credit risk and prudent loan classification and provisioning.\n- Structural and development priorities:\n  - Maintain reform momentum to promote more durable, inclusive and resilient growth.\n  - Further efforts needed in enhancing access to health care and education and better targeting social protection.\n  - Financial market deepening, digitalization, and further financial inclusion to help mobilize domestic savings.\n  - Progress on the authorities’ ambitious climate agenda is welcome; attracting concessional financing and private sector support remains key to implementation."
    },
    {
      "heading": "Staff conclusion",
      "content": "- The IMF mission expresses gratitude for the authorities’ cooperation and reaffirms the IMF’s support for the government’s efforts to implement its economic reform program.\n- The views in the statement are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Staff will prepare a report, subject to management approval, for presentation to the IMF's Executive Board.\n\nIMF Staff Concludes Visit to Rwanda — Press Release No. 22/105, April 5, 2022.\n\n---\n\n\n References\n\n- IMF COVID-19 Hub\n- Policy Tracker\n- Financial Assistance\n- Questions & Answers\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2022/04/05/pr22105-rwanda-imf-staff-concludes-visit-to-rwanda"
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    "Published: April 5, 2022",
    "IMF mission led by Haimanot Teferra held meetings with Rwandan authorities during March 21 – April 5, 2022 to discuss the sixth review under the Policy Coordination Instrument (PCI).",
    "Staff made significant progress toward a staff level agreement needed to complete the sixth review under the PCI; the agreement is subject to approval by IMF Management and Executive Board.",
    "Consideration by the Board is tentatively scheduled for the second half of June 2022.",
    "Follow-up discussions will be needed over the coming weeks given the unusual economic uncertainty following the war in Ukraine.",
    "Real GDP: contraction of 3.4 percent in 2020 followed by rebound of 10.9 percent in 2021.",
    "Inflation: picked up to 5.8 percent in February 2022.",
    "Central bank policy rate: raised by 50 basis points to 5 percent.",
    "Reserves: remaining comfortably above 4 months of prospective imports levels at end-2021.",
    "Fiscal performance: fiscal performance in the first half of FY 21/22 was in line with expectations.",
    "Financial stability: financial sector stability has been maintained; the banking system remains well-capitalized and liquid.",
    "Credit risk: non-performing loans remain low, but credit risk continues to be elevated following the expiry of forbearance measures.",
    "The outlook is clouded by the impact of the war in Ukraine and related uncertainties, which is likely to put the economy under strain.",
    "Staff will revise growth projections down relative to the previous review, with risks tilted to the downside.",
    "Higher global energy and commodity prices are expected to:",
    "Rwanda’s medium-term outlook, while uncertain, remains favorable, supported by the authorities’ commitment to sustainability of public finances and debt and continued structural reforms.",
    "Preserve fiscal and financial stability and mitigate the impact of the external shock on the most vulnerable.",
    "If further support to affected groups or activities is warranted, such support should be:",
    "Continue reforms to:",
    "National Bank of Rwanda (BNR) recommendations:",
    "Financial sector vigilance:",
    "Structural and development priorities:",
    "The IMF mission expresses gratitude for the authorities’ cooperation and reaffirms the IMF’s support for the government’s efforts to implement its economic reform program.",
    "The views in the statement are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Staff will prepare a report, subject to management approval, for presentation to the IMF's Executive Board.",
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    "[Financial Assistance](https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker)",
    "[Questions & Answers](https://www.imf.org/en/About/FAQ/imf-response-to-covid-19)",
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    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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