The IMF Executive Board has wrapped up its 2025 Article IV consultation with Rwanda and completed the sixth and final review of the country’s Policy Coordination Instrument (PCI), praising strong reform performance but warning of mounting fiscal and external pressures.
The Fund said the PCI has helped anchor Rwanda’s post-pandemic recovery, support macroeconomic stability and advance reforms targeting inclusive and climate-resilient growth. All quantitative targets under the programme were met, and nearly all structural reforms were implemented.
Rwanda’s economy “remains strong and resilient,” the IMF said, with real GDP expanding by 7.2 percent in 2024 and the first half of 2025 on the back of services, construction and coffee exports. Inflation stayed within the central bank’s 2–8 percent target band despite pressures from recent tax measures. The current account deficit widened amid higher imports, but reserves remained adequate at 4.8 months of import cover in June.
The IMF said sustaining macroeconomic stability will require continued fiscal consolidation underpinned by stronger domestic revenue mobilisation, spending efficiency and improved management of state-owned enterprise risks. Monetary policy should remain data-driven and proactive, and greater exchange-rate flexibility will be key to absorbing external shocks.
The Board endorsed staff’s appraisal on a lapse-of-time basis, noting that Rwanda is moving ahead with major development projects, including construction of the New Kigali International Airport and expansion of RwandAir. These investments, however, will strain fiscal buffers and widen the current account deficit. Public debt is projected to approach 80 percent of GDP by 2027 as borrowing for large projects increases.
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Directors said Rwanda’s strong PCI track record reflects effective policy implementation despite repeated shocks such as the 2023 floods and the 2024 Marburg outbreak. They cautioned, however, that fiscal pressures remain elevated and called for further revenue measures under the next medium-term revenue strategy, tighter oversight of foreign-financed capital spending and enhanced public investment management.
On monetary policy, the IMF urged the National Bank of Rwanda to maintain a tight stance and allow the exchange rate to play a larger role in adjustment, given that the external position remains weaker than fundamentals imply. Directors also warned that rapid credit growth warrants close monitoring of financial sector risks.
The Board welcomed ongoing efforts to strengthen the NBR law but said shortcomings remain regarding institutional and personal autonomy. Further alignment with international best practice will be needed to limit potential government influence over monetary policy.
The IMF said structural reforms should continue to focus on boosting exports, improving the business environment, reducing trade barriers, expanding climate-resilient investment and promoting women’s participation in higher-productivity sectors.
Staff recommended completion of the sixth PCI review, citing the authorities’ strong reform commitment and prudent policy management over the course of the 2022–25 programme.
