Rwanda inflation hits 10.5pc as food, energy costs soar

Soaring inflation means consumers, and especially low income and poor families struggle to afford key food and non-food items. Courtesy Photo

Rwanda’s annual urban inflation rose to 9.9 per cent in April as costs of energy, food items and utilities spiked to new high, according to the official statistics.

The urban Consumer Price Index (CPI), the gauge of routine changes in costs of goods and services purchased by households, was 7.5 per cent in March following a rise from 5.8 per cent in February.

The rural CPI rose by 11 per cent on annual change, and 4.7 per cent on monthly basis, according to the National Institute of Statistics’ data.

This translated into a 10.5 per cent and 3.7 per cent rise of the overall CPI on annual and monthly change respectively.

Soaring inflation means consumers, and especially low income and poor families struggle to afford key food and non-food items, while meeting other households’ expenses such as rent, transport, school fees, water and electric, among other bills.

For instance, in April costs of food and non-alcoholic beverages increased by 15.7 per cent and 5.5 per cent on annual and monthly basis respectively.

Highest rise

There has been a steep rise in year-on-year costs of the “Energy” by 20.3 per cent on annual change and 1.9 per cent on monthly basis.

Housing, water, electricity, gas and other fuels’ increased by 8.8 percent on annual basis, while transport registered a 7 per cent increment. They increased by 0.4 percent and 3.3 percent on monthly basis.

Costs of restaurants and hotels services soared by 15 per cent on annual change and by 0.3 per cent on monthly basis.

Elevated unemployment

Effects of the rising inflation on consumers have been worsened by elevated unemployment rate in the country, according to the April seasonal monitor released by Fews Net, a USAID platform providing early warning and analysis on food insecurity.

“Economic activity is recovering from the pandemic, but given the elevated unemployment rate and above-normal food prices, purchasing power remains lower than usual,” it indicated.

The monitor  predicts that rising food prices are likely to remain a constraint on household food access in both rural and urban areas  across Rwanda through September.

Unemployment rate in Rwanda rose to 21.1 per cent in 2021, from 17.9 per cent and 15.2 per cent in 2020 and 2019 respectively.

Government data published in March 2022 show that roughly one person in every five persons unemployed. The unemployment rate is higher among youth and women at 26.5 per cent and 24.1 per cent respectively.

READ: Wages no longer at pace with rising cost of living

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