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Rwanda witnessed a deceleration in consumer price growth in July, with a rise of 11.9%, down from the 13.7% recorded in June.
The National Institute of Statistics of Rwanda (NISR) reported that the rate of increase in food prices has been gradually slowing down, falling from over 20% during 2022.
Sustaining this trend, the Central Bank remains optimistic that inflation will continue to decline and align with the target range of 2% to 8% by the close of 2023.
Data from NISR shows that prices of food and non-alcoholic beverages experienced a 23.9% increase in July, a decrease from June’s 26.2%. Prices for bread and cereals surged by 11.3%, meat by 13.1%, milk, cheese, and eggs by 20.7%, and vegetables by 43%.
Costs pertaining to housing, water, electricity, gas, and fuels rose by 3.3%, transportation by 5.8%, while the hospitality sector experienced an 8.6% price hike.
Beyond external factors, the observed price surges are mainly attributed to a slump in domestic agricultural production, making staple foods less affordable for consumers.
Despite the challenges posed by adverse weather conditions and the subsequent dip in agricultural output, the economy is expected to maintain its growth trajectory. The gradual reduction in commodity price acceleration is a testament to the government’s implementation of various measures aimed at achieving economic stability.
According to Professor Herman Musahara, an economics analyst, a cautious outlook is needed as the current figure still stands in double digits, well above the country’s desired target of below 10% and ideally 8%.
“Should we manage to bring down this overlying inflation to below 10% by the fourth quarter of 2023, it would signify significant progress. Tackling imported inflation, particularly from input costs, holds critical importance due to ongoing global disruptions in supply chains.”
He further advocated for ongoing diversification of grain sources, petroleum products, cooking oil, and efforts to enhance the new agricultural season to temper domestic food prices.
