Growth in the East African region remained robust in the financial year 2017-18, with significant recovery occurring in Burundi. Regional growth rates averaged 6.3 percent, up from an average of 4.4 percent in the previous year 2016-17 (Table 1). Increased real economic growth was mainly driven by the services sector, agriculture and investment in infrastructure. After two years of contraction following a socio-political crisis between 2014 and 2016, Burundi’s economic growth recovered to 2.8 percent in 2016-17 and 4.0 percent in 2017-18.

Inflation rates in the East African Community (EAC) countries reduced to an average of 3.5 percent in 201718 from 8.1 percent in the previous year, with all countries registering single digit inflation. The more conducive weather conditions that followed the droughts experienced in 2016 allowed for increased agricultural production, and this supported a substantial easing of inflationary pressure across the countries. 

Consequently, central banks in the region pursued more accommodative monetary policies to further support growth. For example, Rwanda reduced the monetary policy rate by 62 basis points to 5.7 percent, while Uganda and Kenya eased the central bank rate (CBR) by 100 basis points and 50 basis points to 9.0 percent and 9.5 percent respectively, over the same period.