Economic growth in Rwanda could accelerate to more than 10% this year if construction of a planned $1.3 billion airport starts, according to the World Bank, which increased its estimate for 2019 expansion for a second time.
Growth was likely 8.5% last year, more than the 7.8% the Washington-based lender had initially anticipated, according to World Bank Senior Economist Aghassi Mkrtchyan.
“The growth will be driven by an unexpected magnitude of fiscal expansion,” he told reporters in the capital, Kigali. “Growth is expected in double digits if works on Bugesera airport are implemented this year or next year, but medium term growth remains strong” and is projected at 8%.
Rwanda and Qatar Airways have agreed for the Gulf airline to take on construction and operational work for the airport in exchange for a 60% stake in the facility.
While monetary policy will remain accommodative, the return of inflation to the “normal range” and exchange-rate pressure have narrowed the central bank's policy space, he said. Rwanda's fiscal deficit for 2020 will remain “well above” the historical average between 8% and 8.2%, he said.
To contact the reporter on this story: Saul Butera in Kigali at sbutera2@bloomberg.net
To contact the editors responsible for this story: Gordon Bell at gbell16@bloomberg.net, Helen Nyambura, Alastair Reed
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