KIGALI - Rwanda's economy is expected to grow at between 4.2 and 6.2% in 2017 but it may struggle to achieve the upper limit due to slowing public spending and the impact of drought on agricultural output, the World Bank said on Wednesday.
GDP growth is undercut by weak private sector investment, lower than expected returns from public and private investment in the hospitality sector in areas like conferences and exhibitions and a volatile external environment, the Bank said.
"It (6.2%) seems ... quite hard to reach. The impact of drought on agriculture which affected the last quarter of 2016 and first quarter of 2017 will be an issue," said the Bank's senior economist for Rwanda, Aghassi Mkrtchyan.
"The other (issue) is the fiscal restraint as government is very careful about debt sustainability .... That's why we should not be expecting a lot of support to the economy from fiscal expenditure this year," he said during the launch of an economic update. The central African nation has posted strong growth rates in recent years fuelled by business-friendly policies and inflows of foreign investment. The government has forecast 2017 growth at 6.2% and 6.8% next year.
Growth slowed to 1.7% in the first quarter of 2017, from 8.9% in the same period last year. 2016 growth stood at 5.9%.