Rwanda economic update: making the most of nature based tourism in Rwanda
The Rwandan economy continued to achieve strong growth in 2022 despite global headwinds and an unprecedented increase in food prices, according to this20th edition of the Rwanda Economic Update report. Rwanda’s GDP grew by 8.4 percent in the first three quarters of 2022, after reaching 11 percent in 2021. Growth was spurred by the services sector, especially the revival of tourism, leading to the improvement of employment indicators to levels similar to those at the beginning of the COVID-19 pandemic in early 2020. However, rising food prices may have exacerbated poverty and food insecurity, according to the Rwanda Economic Update. The increase in international commodity prices, related to the war in Ukraine combined with the poor harvest in Rwanda, have led to substantial increases in energy, transport, and food prices, with urban inflation rising to 21.7 percent in November 2022. Rising food prices particularly affected the poor, who devote a large share of their spending to food and appear to have faced higher food inflation than richer households did. Measures adopted by the government to mitigate the effects of inflation over the past year include an increase in subsidies (primarily on fuels, fertilizers, seeds, and public transit), increased spending on social protection, and increases in teachers’ salaries, as well as government contributions to school feeding programs.