Rwanda inflation hits 16.1pc as food costs keep rising

Rwanda inflation hits 16.1pc as food costs keep rising
Cost of things like bread, cereals, meat and vegetables skyrocketed to levels ranging between 16 per cent and 28 per cent on annual basis. Courtesy Photo

Food inflation rose yet again by 25.1 per cent on annual change in June as cost of items under ‘Food and non-alcoholic beverages’ increased, followed by prices of the “energy” as well as services of restaurants and hotels at 18.2 per cent and 14.3 per cent respectively.

In particular, cost of things like bread, cereals, meat and vegetables skyrocketed to levels ranging between 16 per cent and 28 per cent on annual basis, according to the latest Consumer Price Index (CPI) released Sunday by the National Institute of Statistics of Rwanda (NISR).

There has also been a rise in cost of milk and eggs, among others.

Cost of transport, which account for 12 per cent share of the basket of items used to gauge change in the cost of living, also increased by 11.5 percent on annual change.

NISR data show the overall rate of inflation in June reached 16.1 per cent.

It is the rural CPI that increased sharply by 17.9 percent on annual basis and 1.5 percent on monthly basis, while urban CPI increased by 13.7 percent on annual basis and by 0.8 percent on monthly basis.

This implies that a section of consumers whose wages barely changed to reflect  the rising cost of living, are grappling with some of the highest costs for essentials, and this is hurting low income earners and the vulnerable families the most.

Also read: Wages no longer at pace with rising cost of living

Retail prices of most food items, household consumables and utilities have kept on the rise since January when inflation stood at 4.3 per cent.

Inflation has since more than tripled as it rose to 10.5 per cent and 14.8 per cent in April and May respectively.  

Items like rice, sugar, cooking oil and most imported products all shoot in prices month in month out driven by supply bottlenecks and global fuel price spikes induced largely by the Russia-Ukraine conflict.

In particular, consumers’ pockets were hit by petrol and diesel prices at Rwf1,406 and Rwf1,503 per litre on June 10, a fifth hike since the start of the year.

Government indicated that pump prices were expected  to shoot Rwf1,719 and Rwf1,676 a litre if it had not put in subsidy to cushion consumers against effects high cost of transport and spikes in costs of goods.

However, producers and suppliers say they continue to incur high input and production costs which see even prices of locally made products skyrocket day by day.

The June inflation report shows that cost of “local products” increased by 12.6 percent on annual change and increased by 0.7 percent on monthly basis, while prices of the “imported products” increased by 16.9 percent on annual basis and increased by 0.9 percent on monthly basis.

The prices of the “fresh products” increased by 22.2 percent on annual change and increased by 2.6 percent on monthly basis.