March 25, 2014 / 9:04 AM / in 4 years

Rwanda's economic growth slumps to 4.6 percent in 2013

KIGALI (Reuters) - Rwanda’s economic growth dropped to 4.6 percent last year, well below both the central bank’s forecast of 6.6 percent and its 7.3 percent growth in 2012, the country’s statistics office said on Tuesday.

The east African nation suffered from cuts in budgetary support by donors in 2012, after United Nations monitors accused it of backing rebels in the neighbouring Democratic Republic of Congo.

The central bank warned in February the country probably had missed its growth target for last year after the aid cuts caused the services sector to expand less than expected. The sector grew 4 percent, down from double-digit growth in 2012, the statistics office said.

“This suggests that domestic demand continued to suffer despite the reinstatement of aid,” said Mark Bohlund, the senior economist for sub-Saharan Africa at IHS Global Insight in London.

The farming sector grew by 3 percent. Manufacturing rebounded to post growth during the period.

Bohlund said the 2013 growth figure could cause IHS to revisit its 2014 growth forecast of 6.8 percent, because it was based on faster growth momentum from last year.

Rwanda is among the economies in the region that investors have hailed for solid fundamentals, including low debt and inflation. It sold $400 million in a debut Eurobond last April.

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