[{"bbox": [97, 153, 1111, 224], "category": "Text", "text": "*IMF has not yet published any formal actual numbers for 2021, thus only projections are indicated for years 2021 and 2022. The only exception is Real GDP, for which IMF endorsed government's official figure released in March 2022.*"}, {"bbox": [97, 252, 1135, 627], "category": "Text", "text": "The International Monetary Fund (IMF) completed 2021 Article IV consultation and 5th review under the Policy Coordination Instrument (PCI) at the end of 2021. PCI has been in place since June 2019 and will be implemented until June 2023, following a one-year extension approved in 2021. Rwanda is one of the first low-income countries to benefit from a PCI instrument. In April 2022, IMF also concluded a staff visit to Rwanda under the 6th PCI review, report of which will not become available prior to early July 2022. This instrument does not include any financial transfer, only policy assessment and technical assistance. It aims to accompany the 'implementation of the National Strategy for Transformation (NST1), while maintaining macroeconomic stability'. The PCI aims specifically at developing a medium-term fiscal plan, enhancing domestic revenue mobilisation and improving fiscal transparency. However, in August 2021, Rwanda became a beneficiary of Special Drawing Rights (SDRs) allocation in amount of about USD 219 000 000, for budget financing. Implementation of PCI also enabled the use of IMFs emergency assistance provided by the Fund under the Rapid Credit Facility (RCF1 and RCF2), as well as 2020 debt service relief under the Fund's Catastrophe Containment and Relief Trust (CCRT), which have been instrumental in strengthening the country's external position and in providing the needed additional fiscal space."}, {"bbox": [97, 654, 1135, 920], "category": "Text", "text": "During the latest IMF review mission, real GDP growth for 2021 was confirmed at 10.9%, higher than the projected 10.2% under the 5th PCI review, which follows a 3.4% contraction in 2020. This demonstrates a rather strong navigation through the COVID-19 pandemic. The economic recovery was achieved through robust fiscal stimulus and accommodative monetary policy, solid global recovery, a swift vaccination campaign and targeted lockdowns. For 2022, real GDP growth is projected to reduce to 7%. The war in Ukraine and global uncertainties will most likely negatively impact GDP. Growth is expected to return to its pre-pandemic trend (10%) by end-2023. The Government's response to the pandemic – including fiscal support to households and business – has been considered 'well-designed and targeted'. IMF also agreed on relaxation of fiscal programme targets in order to accommodate for additional spending needs. The public budget deficit was lower than projected in the second half of FY 2020/21 notably because of higher income tax collection."}, {"bbox": [97, 949, 1135, 1055], "category": "Text", "text": "Despite otherwise strong economic performance, at the onset of the COVID-19 pandemic, debt started rising rapidly and the risk of debt distress shifted from low to moderate. Debt sustainability is increasingly becoming a concern, projected to supersede 80% of GDP in 2022. Rwanda has very limited space to absorb shocks. Stress tests show that solvency risks are elevated."}, {"bbox": [97, 1083, 1135, 1243], "category": "Text", "text": "The authorities have however successfully raised USD 620 000 000 in a second Eurobond issuance in August 2021. 85% of the proceeds were used to buyback 85% of the outstanding USD 400 000 000 Eurobond maturing in 2023, and to early redeem other commercial debt. This financial operation will help reduce near-term liquidity risks. To accommodate government spending needs and allow flexibility in addressing future shocks, the PCI fiscal rule was suspended in favour of a consolidation path for the fiscal deficit that is expected to gradually return to medium-term target of 65% GDP."}, {"bbox": [97, 1272, 1135, 1432], "category": "Text", "text": "During the year 2021, the external sector, and in particular regional trade, adjusted to the pandemic situation started recovering after experiencing significant deterioration in 2020. Nevertheless, the trade in goods deficit deteriorated in Rwanda by around 30% to USD 2 200 000 000 in 2021 compared to USD 1 700 000 000 in the previous year. This was driven by a decrease of 21.9% in exports and increase in imports by 3.5% in 2021. The trade deficit in goods and services is expected to increase further as the economy picks up in 2022 and price of raw commodities is increasing."}, {"bbox": [97, 1460, 1135, 1538], "category": "Text", "text": "Based on this analysis, despite experiencing some challenges in light of global economic uncertainties, it can be concluded that the authorities are pursuing a stability-oriented macroeconomic policy and the eligibility criterion is met."}, {"bbox": [1016, 1678, 1144, 1705], "category": "Page-footer", "text": "Page 11 of 30"}]