Rwandan economy to contract by -0.2 percent, says IMF

An International Monetary Fund (IMF) mission has projected that the Rwandan economy will contract by -0.2 percent owing to the effects of the COVID-19 pandemic, according to a news report by The New Times.

The projections of a contraction come after previous expectations and projections that the economy would grow by about 2 percent.

An economic contraction means a decline in national output measured by the value-added and created through the production of goods and services in the country during a certain period.

Contraction signifies a drop in real personal income, industrial production, and retail sales among others as was evidenced during the lockdown and consequent months.

After weeks of holding meetings with various government agencies, the IMF mission led by Haimanot Teferra revised downward informed by the extent of local and domestic shocks.

"Given the size of external shocks and the domestic shock caused by containment measures, real GDP growth is now projected to contract to -0.2 percent in 2020 and rebound to 5.7 percent in 2021," the mission noted.

The IMF however noted that economic activity has started to show signs of recovery following a sharp contraction in the second quarter of 2020 caused by the COVID-19 pandemic and the stringent containment measures.