Consumer prices on Rwandan market only increased by 5 percent year-on-year in January 2024, a deceleration when compared to 20.7 percent recorded in January 2023.

This is according to the National Institute of Statistics Rwanda (NISR). In December 2023, consumer prices had eased to 6.4 percent.

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Inflation is the pace at which prices of consumables increase on the market year on year and on a monthly basis, and it is calculated based on approximately 1,622 products in 12 urban centres of Rwanda.

Prices of foodstuffs and non-alcoholic beverages increased by 7.4 per cent, bread and cereal prices declined by 0.7 per cent, meat prices by 14.7 per cent, milk, cheese, and eggs by 17.7 per cent, and vegetables saw no change in prices.

The cost of housing, water, electricity, gas, and other fuels increased by 2.1 per cent, transportation rose by 6.4 per cent, while prices in restaurants and hotels increased by 4.7 per cent.

Consumer prices started to fall back within the National Bank of Rwanda (NBR) target range between 2 percent and 8 percent in December 2023 and has now averaged to desired percentage of 5 percent.

However, in mid-January, Central bank Governor John Rwangombwa noted that Red Sea-related disruption to global trade is seen as an inflationary risk and might result in a rise in transport costs for imported goods if the situation is not contained within the shortest time possible.

"So, it is seen as a risk now, expecting that it will be overcome in the shortest time possible. But if it persists, then it might affect especially the transport cost. How much that will impact the goods that are being imported we are yet to see,” he said.

Other developments on the Rwandan market include the slight reduction in fuel prices whereby effective February 12, a litre of petrol will cost Rwf1,637, and a litre of diesel Rwf1,632, according to a communique from the Rwanda Utilities Regulatory Authority (RURA) on Saturday.

Fuel prices factor in inflation in a sense that their increase means an increase in logistic cost which consequently impacts commodity prices on the market.

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Inflation reached its highest peak at 21.7 percent in November 2022 before starting a decelerating trend since the beginning of 2023, following different government measures put in place to tame it, despite the poor agriculture performance that persisted across seasons over two consecutive years.

Owing to the recent agriculture season that relatively performed better compared to previous ones, consumers started seeing a drop in food products on the market towards the end of 2023.

Overall, the decline is also attributed to the monetary policy tightening measures taken throughout 2023, government-incentivized measures, and falling prices of major international commodities.

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With the National Bank of Rwanda (NBR) maintaining the key repo rate at 7.5 percent in November 2023 to tame inflation and observation from global economic trends, economists expect inflation to further ease in 2024, subject to agricultural performance and geopolitical climate.