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Kigali - Rwanda's inflation rate is expected to stand at 3.2% at the end of this year, the International Monetary Fund said on Monday, urging the government to reduce the costs of energy and transport to facilitate growth.
General inflation, both rural and urban, stood at 3.3% in August, official data showed.
Paulo Drummond, the deputy division chief in the African Department of the IMF, said the economy was expected to expand by 6% this year, in line with the government's forecast.
"For the Rwandan economy to grow and for the private sector to be leading the growth in Rwanda it would be very important that the costs of businesses come down," Drummond told a news conference after a visit to the country.
He said costs of electricity, labour, transport and finance were holding back businesses while access to finance was also a problem.
Business people agreed with the IMF's assessment on the cost of doing business in the country.
"The electricity cost is affecting our business. We have to contain the cost. And one of the things we are concerned about is the unpredictability of the electricity price," said a factory owner who did not wish to be named.
Finance Minister Claver Gatete told the same news conference the government was focusing on new railway links as well as electricity generation plants in order to lower the costs of doing business.
Rwanda could also import electricity from countries in the region like Ethiopia and Uganda to make up for any power generation shortfalls at home, the minister added.
The east African nation saw economic growth slip to 4.6% last year from 7.3% in 2012 after donors cut aid over Rwanda's alleged involvement in a conflict in the neighbouring Democratic Republic of the Congo.
Donors have mostly resumed bilateral assistance, and President Paul Kagame's government has won praise for its economic reforms although his opponents and rights groups accuse him of trampling political and media freedoms, something the government denies.
