evidence: Rwanda's economy has remained resilient and adaptable despite challenging external and domestic factors, achieving a 7.6% growth rate in the first three quarters of 2023. GDP growth is expected to regain momentum in 2024–26, with a projected average growth of 7.2%. The services sector sustained domestic demand, and the rebound of the industrial sector contributed to the robust growth and the positive economic trajectory. Rwanda’s public-sector-led development model has shown its limitations, with public debt increasing significantly in recent years. The country’s heavy reliance on large public investments (at 13% of GDP in 2019) has led to substantial fiscal deficits, financed through external borrowing. Consequently, the debt-to-GDP ratio rose to 56.7% in 2019 (from 19.4% in 2010) and was estimated to have reached 71% of GDP in 2020, following an increase in borrowing needs due to the pandemic. External financing through grants and concessional and non-concessional borrowing has played a key role in financing public investments. Going forward, the private sector looks set to play a bigger role in helping to ensure economic growth. Low domestic savings, a shortage of skills, and the high cost of energy are some of the major constraints to private investment. Stronger dynamism in the private sector will help to sustain high investment rates and accelerate growth. Promoting domestic savings is critical, along with inclusive growth. [...] Last Updated: Apr 03, 2024