“In Q2 2019, Growth Domestic Product-GDP at current prices was estimated to be 2,255 Billion Frw, up from 2,001 in Q2 2018. Estimates calculated in 2014 prices show that GDP growth was 12.2% higher in real terms compared to Q2 2018-NISR
The country’s economy continues its resilience growing 12.2 percent in the second quarter, 2019 up from 6.8 percent in the same period under review, an optimism that it is likely to grow well above the projected 7.8 percent by December,2019. On a quarterly basis, the growth was up from 8.4 percent in the first quarter.
According to National Institute of Statistics of Rwanda-NISR, the services sector contributed 47 percent of GDP, agriculture contributing 28 percent, while Industry contributed 17 percent with 8 percent was attributed to adjustment for taxes and funding on products.
“In the second quarter of 2019, GDP at current market prices was estimated to be Rwf 2,255 billion, up from Rwf 2,001 billion in Q2 2018,” The report released by National Institute of Statistics of Rwanda read.
Whereas, the total final consumption expenditure rose by 6 percent, Government final expenditures increased by 57 percent but a decline in the Household final consumption was recorded at 4%.
Regardless of the efforts put in place to bring down rising import receipts and raise exports, imports continued to grow by 31 percent well above exports which rose by 17 percent in the second quarter; 2019.The surge in imports is attributed to capital goods due to ongoing construction of major projects in the country. In this quarter, the gross capital formation grew by 52 percent.
Accordingly, both tea and other cash crops (incl. flowers, pyrethrum & sugar cane) decreased by 3% and 4% respectively although export crops grew by 6 percent due to an increase in the production of coffee at 21 percent.
In terms of growth, service sector grew by 12 percent, Agriculture growth was 5% while industry grew by 21 percent with all sectors contributing 5.7 percentage points,1.5 percentage points and 3.6 percentage points to GDP growth respectively in the second quarter,2019.
Within agriculture, food crops production stood at 4% down from 6% in the same period under review in 2018, construction activities increased by 32 percent, mining and quarrying 13 percent and manufacturing grew by 16 percent.
Meanwhile, wholesale & retail trade activities of locally made and imported products increased by 23% driving growth in the service sector with transport activities growing by 17% while both financial and Hotel/Restaurant activities sector grew by 13%. The telecommunications services recorded a sluggish growth of 1 percent compared to -2 % in the first quarter but declined from 18 percent in the same period in 2018.
As the government grapples to fill the void in trade receipts with imports continuing to surge, widening trade deficit further, there is a ray of hope glimmers in the manufacturing sector.
As of July, 2019, trade deficit stood at US$ 182.22 million, an increase of 8.69 percent compared to the previous month of June. Year-over-year, formal trade in goods deficit increased by 21.60 percent on the deficit of July 2018.
Thus, the growth in the sub sector, as experts say is triggered by the closure of the Rwanda-Uganda border which saw most of Ugandan products not accessing the market.
As a result, production of construction materials which includes metallic products grew by 43%, other products such as cement grew by 42 and Chemicals and plastic products increased by 32% boosted mainly by the production of paints, plastic construction materials and Soaps. The wood and paper and food processing sub sectors grew by 35% and 8% respectively with beverages increasing by 6%.
“There was a demand for local products to fill the gap that was left by Ugandan products and this boosted local manufacturers since the market was guaranteed. But we should also understand that Made in Rwanda campaign also contributed much to the growth of this sector (Industry),” David Mukiza, a business consultant said.
Central Bank had in the first quarter noted that there is a likely spill over as US and China continue their trade wars and international crude oil price changes but maintained measures are in place to contain it.