IMF LOWERS GDP GROWTH ESTIMATE TO 3.7 PERCENT

UNCLAS KIGALI 000718 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ECON EFIN EINV RW SUBJECT: IMF LOWERS GDP GROWTH ESTIMATE TO 3.7 PERCENT ¶1. (SBU) IMF Resident Representative Dmitry Gershenson told Emboff November 2 the IMF has lowered its estimate of Rwanda's GDP growth in 2009 from 5.6 percent to 3.7 percent. The new estimate follows consultations between the Government of Rwanda (GOR) and an IMF mission led by Catherine McAuliff that is currently visiting Rwanda. Both the IMF and Rwandan Minister of Finance James Musoni attributed the lower growth rate to repercussions from the global economic downturn and reduced domestic agricultural production in the second half of 2009. ¶2. (U) Minister of Agriculture Agnes Kalibata told the press October 23, that growth in agricultural production was likely to decline from 16 percent in 2008 to 7-8 percent in 2009 due to late rains and ongoing drought in the Eastern and Southern provinces. Strong growth in agricultural productivity over the last two years has helped offset declines in exports, manufacturing and tourism during the same period due to the global economic downturn. ¶3. (U) During the first half of 2009, exports declined by 32 percent and visitors to the national parks declined by 18 percent compared to 2008, according to an October 15 Ministry of Trade and Industry report to the Private Sector Cluster Group. Last year Rwanda's economy grew 11.2 percent, largely propelled by gains in agriculture. In 2008, agriculture represented 33 percent of GDP, according to the National Institute of Statistics "National Accounts 1999-2008" released in mid-October. ¶4. (U) Local bankers and officials at the Ministry of Finance told Emboff November 2, they are seeing increased activity in construction and minerals exports, and they predict higher GDP growth rates in 2010. According to statistics released from the Ministry of Trade and Industry on October 15, local and foreign investment has increased by 213 percent in 2009 compared to 2008. Construction represents 44 percent of total new investment. SYMINGTON