Rwanda’s economy is expected to grow at a slower pace in 2025 compared to 2024, according to the country’s Finance Minister, Yusuf Murangwa. Addressing parliament on Thursday, Murangwa forecast economic growth of 7.1% in 2025, a decline from the robust 8.9% recorded in 2024.
The finance minister was presenting the draft budget for the 2025/26 fiscal year, which runs from July to June. While he did not provide specific reasons for the projected economic slowdown, Rwanda’s economy remains heavily reliant on agriculture, tourism, and manufacturing sectors that are often vulnerable to external shocks and climate variability.
Despite the anticipated dip in growth, the government plans to significantly increase spending in the upcoming fiscal year. The proposed budget for 2025/26 stands at 7.03 trillion Rwandan francs (approximately $5.01 billion), marking a 20.7% increase from the 5.82 trillion francs allocated in 2024/25.
Of the total proposed expenditure, 4.11 trillion francs is expected to be financed through domestic revenue collection. The remainder will be sourced from 2.15 trillion francs in loans and 585.2 billion francs in external grants. Murangwa did not elaborate on the specifics of the loan arrangements, including interest rates or repayment terms.
Looking ahead, the minister projected that the economy will rebound slightly, growing by 7.5% in 2026. This positive trajectory is expected to continue with 7.4% growth in 2027, followed by a modest 7.0% in 2028.
The increased spending signals the government’s intent to support key sectors and drive development goals, even as it navigates a cooling in short-term economic expansion. The final version of the national budget for 2025/26 is expected to be presented in June.
Rwanda has in recent years positioned itself as a regional hub for innovation and investment, and its leaders appear keen to sustain this momentum through strategic public expenditure, even amid shifting economic conditions.
