Rwanda’s inflation rate rises slightly to 7.3% in December

Rwanda’s annual inflation rate rose by almost one percentage point to 7.3 per cent last month, up from 6.4 per cent in November 2016, the National Institute of Statistics of Rwanda (NISR) monthly consumer price index (CPI) report indicates.

The report indicates an increase of 0.3 per cent on a monthly basis. The report that was released yesterday shows that the increase was mainly driven by the continuing increase in food and non-alcoholic beverage prices over the reporting period.

According to NISR, food and non-alcoholic beverages, housing, water, electricity, gas and other fuels including transport rose 16.4 per cent, 1.4 per cent and 7.7 per cent, respectively. Food and non-alcoholic beverages category adds the highest weights to the total weight of a basket of goods and services (over 1,000) used by NISR to measure movements in consumer prices.

Rwanda uses CPI as main gauge of inflation. Prices for ‘local’ goods category increased by almost 7.1 per cent year-on-year and 0.2 per cent on a monthly basis. While prices of the “imported” products group were up by 7.9 per cent on annual basis.

The annual average inflation rate between December 2016 and December 2015 stands at 5.7 per cent, according to the report.

Lucie Mutetijabiro, the NISR price statistics and research unit team leader, said the underlying inflation rate (excluding fresh food and energy) was up marginally by 0.6 per cent when compared to November 2016, and increased by 5.3 per cent when compared to December 2015.

The annual average underlying inflation rate was recorded at 4.1 per cent. Last month, central bank governor, John Rwangombwa, was optimistic that the inflation rate would ease to about 5.7 per cent by the end of the first quarter of 2017.