Consumer prices in Rwanda continued on a downward trend, with a decline of 14.1 percent in May compared to the 17.8 percent recorded in April 2023.
According to the National Institute of Statistics of Rwanda (NISR), inflation has been steadily decreasing since the beginning of the year. In March, it stood at 19.3 percent, dropping from 20.8 percent in February, and 20.7 percent in January.
During the Central Bank’s quarterly economic review, Governor John Rwangombwa emphasized that inflation is expected to further decrease and reach the target range of 2 percent to 8 percent by the end of 2023.
Inflation, which measures the rate at which commodity prices increase over a specific period, is calculated based on approximately 1,622 products in 12 urban centers across Rwanda. It is worth noting that the speed at which prices rise or decline takes time to be reflected in the actual prices of purchased foodstuffs in the market.
Data from NISR reveals that prices of foodstuffs and non-alcoholic beverages increased by 25.4 percent in May, a decrease from 36.8 percent in April. In May, bread and cereal prices rose by 14 percent, meat prices by 16.8 percent, milk, cheese, and eggs by 22.6 percent, and vegetables by 59.4 percent.
The cost of housing, water, electricity, gas, and other fuels increased by 3.6 percent, transportation rose by 7.6 percent, while prices in restaurants and hotels increased by 11.5 percent.
The gradual decline in the pace of commodity prices reflects the government’s implementation of various measures aimed at achieving economic stability.
These measures include providing subsidies for fuel and fertilizers, as well as tightening the Central Bank’s lending rate. Additionally, the recent decision to waive value-added tax on maize flour and rice, along with the establishment of maximum prices for maize, maize flour, rice, and Irish potatoes (Rwanda’s major staple foods), were implemented after an inspection by the Ministry of Trade and Industry revealed unjustifiable price hikes by some traders.
In addition to imported inflation, the observed price hikes were largely attributed to poor domestic agricultural production, which made it challenging for consumers to afford staple foods. Despite the challenges posed by unfavorable weather conditions and the resulting decline in agricultural production, the economy is expected to continue growing.