Inflation soars to 7.14%

Rwanda’s inflation for the month of July increased to 7.14 per cent, up from 5.82 per cent in June, driven by the rise in prices of food and non-alcoholic beverages which increased by 1.4 per cent. The National Institute of Rwanda (NISR) said that the annual underlying inflation rate, which strips-off fresh food and energy, increased to 2.4 per cent up from 1.9 per cent. The Minister of Finance and Economic Planning, John Rwangombwa, told Business Times that government had taken action in curbing inflation. Government wishes to contain inflation to single digits and boost economic growth to at least 7 per cent in the 2011/12 financial year. “Government has already taken action on reducing fuel and sugar prices,” Rwangombwa said. The increase of 1.14 per cent in the prices of food and non-alcoholic beverages is primarily attributable to the increase of vegetables, non-alcoholic beverages and meat, which gained by 1.87 per cent, 2.55per cent of and 0.45 per cent respectively, NISR said in a statement. Transport costs rose by 11.85 per cent while education increased by 20.85 per cent. While prices of local goods increased by 6.62 per cent on an annual change with a monthly change of 0.47 per cent, prices of the imported products increased by 9.20 per cent with a monthly change of 0.12 percent. Last week, the government passed a directive to lower sugar prices to Rwf800 per Kilogramme from Rwf1200. Sugar miller Kabuye Sugar Works (KSW) also reduced the factory price to Rwf31, 000 per 50 kilogram sack while distributors sell a sack at Rwf33, 500 to retailers. In the fiscal year 2011/2012, government cut fuel taxes by Rwf100 per litre for both petrol and gasoil to curb inflationary pressures. As the scheme began to take effect this July, local pump priceswent down from Rwf1,060 to Rwf1,024. The average pump prices for both petrol and diesel at Rwf1,060 per litre was the highest compared to regional averages of Rwf839 and Rwf816 per litre for petrol and diesel, respectively. As consumers dug deeper in their pockets in Uganda and Kenya due to high inflationary pressures, Rwanda’s inflation rates remain in single digits compared to the rest of the region. In Uganda, for the past 10 years, the economy has suffered a high 18.7 per cent inflation rate, amid a continually depreciating Shilling and high fuel prices. In the region’s economy giant, Kenya, as of July, inflation accelerated for the ninth straight month to 15.53 per cent from 14.49 per cent in June. Ends

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Inflation soars to 7.14%