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KIGALI, Rwanda – Rwanda's economic trajectory is set to shift in 2025, with Finance Minister Yusuf Murangwa forecasting a slower growth rate compared to the previous year. This announcement comes alongside projections for a significant increase in government spending for the upcoming 2025/26 fiscal year, representing approximately a 20% rise.

Murangwa shared these insights on Thursday, highlighting a nuanced economic outlook for the East African nation. While Rwanda has consistently demonstrated robust economic growth in recent years, fueled by investments in infrastructure, tourism, and technology, the projected slowdown suggests a need for careful economic management and strategic adjustments.

Factors Influencing the Slower Growth

Several factors are likely contributing to this anticipated deceleration. Global economic headwinds, including inflation and supply chain disruptions, are impacting economies worldwide, and Rwanda is not immune. Reduced demand from key trading partners and fluctuations in commodity prices could also play a role. Furthermore, the ongoing impact of global events and geopolitical uncertainties adds another layer of complexity.

Increased Government Spending: A Strategic Investment

Despite the projected slower growth, the planned increase in government spending signals a commitment to long-term development goals. The additional funds are expected to be allocated to key sectors, including education, healthcare, and infrastructure projects. This strategic investment aims to boost productivity, create jobs, and improve the overall quality of life for Rwandans.

“We are committed to investing in our people and infrastructure to ensure sustainable and inclusive growth,” stated Minister Murangwa. “While we anticipate a more moderate growth rate in 2025, we remain confident in Rwanda’s economic resilience and its ability to overcome challenges.”

Fiscal Year 2025/26 Priorities

The 2025/26 fiscal year will prioritize several key areas:

• Infrastructure Development: Continued investment in roads, energy, and digital infrastructure to support economic activity and connectivity.
• Human Capital Development: Strengthening education and healthcare systems to improve the skills and well-being of the workforce.
• Private Sector Support: Creating a favorable environment for businesses to thrive, including access to finance and streamlined regulations.
• Climate Change Resilience: Investing in measures to mitigate the impacts of climate change and promote sustainable development.

Looking Ahead

Rwanda’s economic future hinges on its ability to adapt to evolving global conditions and effectively manage its resources. While the projected slowdown in 2025 presents a challenge, the government’s commitment to strategic investments and sound economic policies positions the nation for continued progress in the years to come. The focus will be on diversification, innovation, and resilience to ensure sustainable and inclusive growth, ultimately solidifying Rwanda’s position as a leading economy in East Africa.