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Rwanda to be the third fastest growing economy in Africa in 2024 – UN report

Among the top ten African countries expected to register high economic growth in 2024, Rwanda comes third after Libya and Senegal with 7.6 and 9.2 percent, respectively.

In East Africa, the country’s prospective leading economic performance in 2024 will be followed by DR Congo, Uganda, and Tanzania, the World Bank said in its report on global economic prospects released this week.

These three will experience modest improvements on the meager growth recorded last year. They posted a combined 1.8% growth in 2023, a decline from the previous year.  

Rwanda’s economy had a strong start in 2023, with GDP growing by 9.2% year-on-year in the first quarter. 

Earlier predictions by Finance Minister Uzziel Ndagijimana in February had estimated a growth rate of around 7.5% for the years 2024 and 2025. Rwanda experienced a robust economic growth of 8.2% in the year 2022, Reuters reported.

Consumer prices, which have remained challenging for most developing countries in the past two years, will ease down in 2024 and 2025, however, subject to geopolitical environment and climate conditions.

It is estimated that Rwanda’s inflation, averaging 14.7 percent in 2023, will decelerate to 7.2 percent in 2024 and 5.4 percent in 2025.

While external conditions are projected to remain unfavorable for the African economies due to a weak global economic outlook and limited external financing opportunities, the report says GDP growth in Africa is forecasted to register moderate improvement in 2024, increasing to 3.5 percent on average.

Slower growth worldwide 

On a worldwide level, the United Nations economists are forecasting low growth globally this year, as recovery from the COVID-19 pandemic remains uneven internationally and wild cards such as climate shocks and geopolitical tensions could undermine progress.

The U.N. ‘s flagship World Economic Situation and Prospects 2024 report launched on Thursday projects global economic growth will slow from 2023’s estimated 2.7 percent to 2.4 percent this year, below the pre-pandemic growth rate of 3 percent.

Developing countries are still struggling to overcome COVID-19 setbacks while coping with high-interest rates and rising debt. The economists forecast that in about a quarter of all developing countries, annual inflation is projected to exceed 10 percent this year.

Worldwide, inflation was forecast to be an average of 3.9 percent this year, down from 5.7 percent in 2023.

While the economic outlook is not all gloom and doom, the experts say they will be watching several indicators to gauge economic prospects this year. They include challenges arising from monetary tightening, weakened global trade and investment, and rising debt vulnerabilities.

They say these can be compounded by heightened geopolitical risks and the rapidly worsening impacts of climate change.

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