Rwanda's economy to expand 6.5 pct in 2015 and 2016 - finance minister

KIGALI (Reuters) - Rwanda's economy is expected to grow by 6.5 percent this year and next after 7.0 percent in 2014, Rwanda's finance minister said on Thursday. Claver Gatete said weakness in the global economy was likely to hurt aid-dependent Rwanda. The IMF, which also forecast 6.5 percent growth in 2015, said Rwanda's economy is likely to remain stable and benefit from low oil prices. Gatete told parliament the draft budget proposal for the 2015/2016 fiscal year (July-June) would increase 0.3 percent to 1768.3 billion Rwandan francs ($2.58 billion). He said the east African nation was determined to reduce its dependence on unpredictable donor aid. Donor funds make up 20 percent of Rwanda's budget, while external loans account for another 13 percent. "The donor aid ... is unpredictable and it’s very small. It’s shrinking every day," he said. Foreign donors froze aid payments to Rwanda in 2012 amid allegations President Paul Kagame's government was helping rebels in neighbouring Congo. Rwanda denied the claims. Economic growth slowed sharply to 4.7 percent after the aid cuts. Gatete said tax receipts for last year were 9.8 billion francs short of the 416.1 billion forecast.

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