Rwandans will have to dig deeper into their pockets as the cost of living continues to rise as prices of basic household items increase.
The latest statistics released this week by the National Institute of Statistics (NISR) show that Rwanda’s Consumer Price Index (CPI), the main gauge of inflation, increased by 13.7 percent year on year in June 2022 up from 12.6 percent in May 2022.
The rise is well above the central bank inflation target of 8 percent for 2022.
“In June 2022, food and non-alcoholic beverages increased by 25.1 percent on an annual basis and decreased by 0.1 percent on monthly basis. ‘Housing, water, electricity, gas and other fuels’ increased by 7.9 percent on an annual basis and increased by 0.1 percent on monthly basis...” reads the statement released on July 10.
Rising inflationary pressures, exacerbated by rising commodity prices, are compounding the policy challenges of balancing economic recovery with maintaining price stability, according to the International Monetary Fund (IMF).
“In view of rising inflation, the National Bank of Rwanda should stand ready to tighten monetary policy more aggressively to anchor inflation expectations.” said Bo Li, the IMF’s Deputy Managing Director and Acting Chair recently after the sixth review of the Policy Coordination Instrument (PCI) on June 23.
In May, the central bank maintained the key repo rate — at which it lends to commercial banks— at 5 percent though it cautioned that low production in the agriculture season A is likely to further fuel inflation with a rise in commodity prices. Transport increased by 11.5 percent on an annual basis and increased by 3 percent on monthly basis.
Restaurants and hotels increased by 14.3 percent on an annual change and increased by 0.3 percent on monthly basis. The data also show the “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 an increased by 2.6 percent on monthly basis.
The prices of the “energy” increased by 18.2 percent on annual change and increased by 0.7 percent on monthly basis.