{
  "title": "IMF Executive Board Completes First Reviews Under the Policy Coordination Instrument, and Resilience and Sustainability Facility for Rwanda",
  "publication": "IMF News, May 24, 2023",
  "sourceUrl": "https://www.imf.org/en/news/articles/2023/05/24/pr23176-rwanda-imf-exec-board-completes-1st-rev-policy-coord-inst-rsf",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) completed today the first reviews of Rwanda’s Policy Coordination Instrument (PCI) and program under the Resilience and Sustainability Facility (RSF). The Board’s decision allows for an immediate disbursement of SDR 73.",
  "publishDate": "2023-05-24",
  "sections": [
    {
      "heading": "Executive summary and disbursement",
      "content": "- The Executive Board completed the first reviews of Rwanda’s Policy Coordination Instrument (PCI) and program under the Resilience and Sustainability Facility (RSF).\n- The Board’s decision allows for an immediate disbursement of SDR 73.95 million (about US$ 98.6 million) under the RSF.\n- The PCI and RSF arrangement were approved on December 12, 2022; the RSF total amount is SDR 240.3 million (about US$ 319 million or 150 percent of quota)."
    },
    {
      "heading": "Economic performance and risks",
      "content": "- Rwanda’s economy recorded robust post-pandemic growth in 2022, but macroeconomic imbalances emerged.\n- Inflation stood at 17.8 percent in April.\n- Drivers of imbalances cited:\n  - Rising food prices.\n  - Strong domestic demand fueled by high credit growth.\n  - Robust import demand coupled with high commodity prices.\n  - Tightening global financing conditions and reduced prospects for external concessional financing.\n- The outlook is subject to high uncertainty from:\n  - Risks of deepening geopolitical fragmentation.\n  - Volatility in global energy and fertilizer prices.\n  - A steeper-than-projected decline in trading partners growth.\n  - A funding squeeze.\n- The costs of humanitarian response and reconstruction following recent floods will generate further spending needs."
    },
    {
      "heading": "Policy priorities and recommendations",
      "content": "- Immediate policy priorities:\n  - Implement a strong, carefully calibrated policy mix to prevent macroeconomic imbalances from becoming entrenched.\n- Fiscal policy:\n  - Frontloaded fiscal policy adjustment is needed.\n  - Continued fiscal consolidation to provide space to withstand future shocks.\n  - Address delays in implementing the Medium-Term Revenue Strategy by promptly implementing revenue-raising measures aimed at broadening the tax base, streamlining exemptions, and enhancing tax compliance.\n  - Adopt more prudent, transparent, and credible public financial management and investment frameworks.\n- Monetary and exchange rate policy:\n  - Decisive monetary policy tightening is needed to contain inflationary pressures and preserve external stability.\n  - Strengthen communication and pursue greater exchange rate flexibility.\n  - Implement reforms to deepen financial and government securities markets to improve the effectiveness of the interest rate-based monetary policy framework.\n- Financial sector and governance:\n  - Vigilance to ensure financial risks remain contained while promoting financial inclusion.\n  - Further strengthening of the AML/CFT framework is important.\n- Climate and resilience:\n  - Continue reforms to allocate climate resources more effectively and transparently to mobilize additional climate funding and attract private green investment.\n  - Advance reforms in green public finance management and climate-focused public investment management.\n  - RSF-supported program will improve transparency and accountability in planning, execution, reporting, and oversight of budget resources dedicated to addressing climate change."
    },
    {
      "heading": "Program implementation and commitments",
      "content": "- Reforms remained broadly on track under the PCI despite a challenging environment.\n- Rwanda’s commitment to advancing the climate agenda has been described as very strong.\n- The RSF-supported program is the first for an African country and aims to build resilience to climate change through improved fiscal transparency and accountability for climate resources."
    },
    {
      "heading": "Key economic indicators (Table 1: Rwanda: Selected Economic Indicators, 2021–25)",
      "content": "- Output\n  - Real GDP growth (%): 2021: 10.9; 2022: 8.2; 2023: 6.2; 2024: 6.7; 2025: 6.9\n- Prices\n  - Inflation - average (%): 2021: 0.8; 2022: 13.9; 2023: 14.5; 2024: 5.0\n- Central government finances (fiscal year)1\n  - Revenue (% GDP): 2021: 25.0; 2022: 25.9; 2023: 22.7; 2024: 21.8; 2025: 22.9\n  - Expense (% GDP): 2021: 20.3; 2022: 20.6; 2023: 19.1; 2024: 18.5; 2025: 18.1\n  - Net acquisition of nonfin. Asset (% GDP): 2021: 12.2; 2022: 11.6; 2023: 9.8; 2024: 9.0; 2025: 9.4\n  - Fiscal balance (% GDP): 2021: -8.6; 2022: -7.6; 2023: -7.3; 2024: -6.5; 2025: -4.8\n  - Public debt (% GDP): 2021: 73.4; 2022: 67.1; 2023: 69.1; 2024: 74.4; 2025: 79.2\n  - External public debt (% GDP): 2021: 54.6; 2022: 48.7; 2023: 54.1; 2024: 60.9; 2025: 68.6\n- Money and credit\n  - Broad money (% change): 2021: 17.1; 2022: 22.5; 2023: 11.3; 2024: 17.4; 2025: 12.4\n  - Credit to private sector (% change): 2021: 14.8; 2022: 13.6; 2023: 8.5; 2024: 17.7; 2025: 21.0\n  - Policy Rate, end-of-period (%): 2021: 4.5; 2022: 6.5; 2023: …\n- Balance of Payments\n  - Current account (% GDP): 2021: -11.2; 2022: -9.8; 2023: -11.3; 2024: -10.5; 2025: -10.1\n  - Reserves (in months of imports): 2021: 5.1; 2022: 4.4; 2023: 4.8; 2024: 5.2\n- Exchange rate\n  - REER (% change): 2021: -9.7; 2022: 8.3\n\n1 Based on fiscal year (i.e. 2022 represents 2021/22). Sources: Rwandan authorities and IMF staff estimates.\n\nIMF Press Release, May 24, 2023.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- PRESS CENTER\n- Rwanda and the IMF\n- IMF-World Bank Debt Sustainability Framework for Low-Income Countries -- A Factsheet\n- Press Releases\n- approved\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/05/24/pr23176-rwanda-imf-exec-board-completes-1st-rev-policy-coord-inst-rsf"
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    "Published: May 24, 2023",
    "The Executive Board completed the first reviews of Rwanda’s Policy Coordination Instrument (PCI) and program under the Resilience and Sustainability Facility (RSF).",
    "The Board’s decision allows for an immediate disbursement of SDR 73.95 million (about US$ 98.6 million) under the RSF.",
    "The PCI and RSF arrangement were approved on December 12, 2022; the RSF total amount is SDR 240.3 million (about US$ 319 million or 150 percent of quota).",
    "Rwanda’s economy recorded robust post-pandemic growth in 2022, but macroeconomic imbalances emerged.",
    "Inflation stood at 17.8 percent in April.",
    "Drivers of imbalances cited:",
    "The outlook is subject to high uncertainty from:",
    "The costs of humanitarian response and reconstruction following recent floods will generate further spending needs.",
    "Immediate policy priorities:",
    "Fiscal policy:",
    "Monetary and exchange rate policy:",
    "Financial sector and governance:",
    "Climate and resilience:",
    "Reforms remained broadly on track under the PCI despite a challenging environment.",
    "Rwanda’s commitment to advancing the climate agenda has been described as very strong.",
    "The RSF-supported program is the first for an African country and aims to build resilience to climate change through improved fiscal transparency and accountability for climate resources.",
    "Output",
    "Prices",
    "Central government finances (fiscal year)1",
    "Money and credit",
    "Balance of Payments",
    "Exchange rate",
    "[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)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Rwanda and the IMF](http://www.imf.org/external/country/RWA/index.htm)",
    "[IMF-World Bank Debt Sustainability Framework for Low-Income Countries -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/imf-world-bank-debt-sustainability-framework-for-low-income-countries)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[approved](https://www.imf.org/en/News/Articles/2022/12/12/pr22426-imf-executive-board-approves-319-million-arrangement-for-rwanda)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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