Rwanda has recorded a significant easing in the increase of consumer prices, with inflation dropping to 9.2 percent in November 2023, marking the first time it has fallen below double digits in the year.
Inflation, which measures the pace at which consumer prices rise annually and monthly, is calculated based on approximately 1,622 products in 12 urban centers across Rwanda. After reaching its peak at 21.7 percent in November 2022, inflation has shown a consistent decelerating trend since the beginning of 2023, ultimately settling at 9.2 percent in November 2023, down from 11.2 percent in October.
This decline comes just ahead of the festive season, a period known for increased consumer spending and heightened prices.
Data released by the National Institute of Statistics Rwanda (NISR) on November 10 revealed significant increases in the prices of foodstuffs and non-alcoholic beverages, bread and cereals, meat, milk, cheese, eggs, and vegetables. Additionally, the cost of housing, water, electricity, gas, and other fuels, as well as transportation, restaurants, and hotels, all experienced notable price hikes.
The primary drivers of these price fluctuations are poor agricultural performance over the past two years, leading to food shortages, as well as imported inflation from external markets. However, there has been a recent easing of food prices, particularly in staple foods like Irish potatoes and sugar.
Notably, the price of Kinigi potatoes has declined from Rwf1,200 per kilogram to between Rwf500 and Rwf550, while another type is now priced at Rwf300 per kilogram.
In addition to the moderate fall in food prices, the Rwanda Utilities Regulatory Authority (RURA) has revised down fuel prices. The maximum pump price for gasoline (premium motor spirit) now stands at Rwf1,639 per liter, down from Rwf1,822, and the retail price for diesel (automotive gas oil) is set at Rwf1,635 per liter, down from Rwf1,662.
The overall decline in inflation can be attributed to monetary policy tightening, government-incentivized measures, and the falling prices of major international commodities. With the National Bank of Rwanda maintaining the key repo rate at 7.5 percent in efforts to combat inflation, economists expect further easing in 2024, contingent upon agricultural performance and geopolitical conditions.
The central bank aims to achieve an inflation rate between two and eight percent and projects an average of 7.6 percent at the end of 2023 (December figures) and around five percent in 2024. At the global level, inflation is projected to reach 6.9 percent by the end of 2023 and 5.8 percent in 2024.
