Rwanda's inflation rate up by 4.7 per cent year on year

Rwanda’s consumer price index the main gauge of inflation increased by 4.7 percent in April 2016 up from 0.9 per cent same period in 2015.

Rwanda’s consumer price index the main gauge of inflation increased by 4.7 percent in April 2016 up from 0.9 per cent same period in 2015.

On a monthly basis, the country’s CPI increased by 0.8 percent in April 2016, a monthly CPI report by the National Institute of Statistics in Rwanda (NISR), released yesterday indicated.

The increase means that Rwandans are now spending extra more francs to buy commodities especially food when compared to the same period last year.

The report indicated an increase in prices for both food and non alcoholic beverages of 5.6 percent.

On average, the year on year inflation  for  housing, water, electricity, gas and other fuels increased by 3.9per cent while that for transport, the main player   rose by 7.6 percent.

Meanwhile, inflation rate due to a reduction in value of money (excluding fresh food and energy) increased by 0.9 percent when compared to March 2016 and 3.6 percent compared to same period the previous year.

This therefore means that the country’s annual average underlying inflation rate is currently established at 2.6 percent and still manageable despite slight currency depreciation.

On an annual basis, the local goods index increased by 4.8 percent while imported goods rose by 4.2 percent, fresh products 7.7 percent and energy by 7.4 percent.

The report further indicated core index which is the long run trend in the price level increasing by 3.6 percent
Overall, figures indicate that country’s inflation rate is moderate and still at low and manageable levels despite the fact that it has been increasing since January last year.

This is because Fewer than 5 per cent inflation rate is still manageable and no cause for alarm as per central bank target, experts said.

Overall, Rwanda’s headline inflation has since increased from 1.8 per cent in 2014 to 2.5 per cent in 2015, driven by rising food prices, especially influenced by vegetable prices.

Core inflation, which excludes fresh products and energy, slightly declined on average from 2.7 per cent in 2014 to 2.1 per cent in 2015 justifying the National Bank of Rwanda (BNR) decision to maintain the ongoing monetary policy stance to continue supporting the financing of economic activities.

The downward pressures according to BNR came from transport prices following the trend in international oil prices.

business@newtimes.co.rw

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