August 28, 2014 / 9:50 AM / 3 years ago

World Bank cuts Rwanda's 2014 growth forecast

KIGALI, Aug 28 (Reuters) - The World Bank has cut its 2014 growth forecast for Rwanda, blaming delayed spending on energy and transport and a slowdown of credit growth to the private sector.

Growth in the east African nation is projected at 5.7 percent in 2014, down from a previous forecast of 7.2 percent given in December, the World Bank said in a report released on Thursday.

In it’s annual budget, Rwanda projects that gross domestic product will grow by 6 percent this year - the same growth projection given by the International Monetary Fund, helped by expansion in the agriculture, services and industrial sectors.

Growth in the landlocked coffee and tea producer slipped to 4.6 percent last year from 7.3 percent in 2012 after donors cut aid over Rwanda’s alleged involvement in a conflict in the neighbouring Democratic Republic of the Congo.

For next year, growth is expected to be 6.6 percent, the World Bank said. Rwanda expects growth at 6.7 percent in 2015.

Investment in energy and transport would spur the private sector and attract foreign direct investment, the Bank said, and help transform the economy into a net exporter,” the Bank said.

Rwanda’s growth rate averaged 8.2 percent from 2006 to 2012 in a country hailed by investors for solid fundamentals, including low debt and inflation. It sold $400 million in a debut Eurobond in April last year.

The country of 11 million people has been attracting a steady stream of investors and firms drawn by a small but growing market which welcomes foreign investors. (Reporting by Jenny Clover; Writing by James Macharia Editing by Jeremy Gaunt)

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