The general inflation rate by annual average has risen to 8.9 per cent during the month of June compared to 8.3 per cent registered in May this year, indicators from the National Institute of Statistics of Rwanda (NISR) show.

But when compared to neibouring countries, Rwanda has managed to tame its inflation at a single digit. 

"It is not good but relatively low compared to the situation we are in,” James Musoni, the Finance and Economic Planning Minister said when contacted.   

The minister attributed the general price increase to escalating international oil prices saying they are making commodies expensive.

Statistics from NISR show that the general Consumer Price Index (CPI), which measures the average price of consumer goods and services purchased by households is 165.2.

This stands for an increase of 2.08 per cent over the previous month, which was 161.8.

According to NISR, the increase in the consumer prices index is primarily due to the escalating prices of food and non-alcoholic beverages, which soared  by 5.33 per cent.

NISR further says increase in health and transport costs—by 3.25 per cent and 2.08 per cent respectively also contributed to the high inflation rate.

In the same month, the price of bread and cereals increased by 6.94 per cent, meat 2.80 per cent, fish 3.99 per cent, and vegetables by 9.38 per cent.

Musoni said the country has been able to control the inflation partly because of improving food production in the first half of this year.

"Through the integrated development programme, we mobilized farmers to use fertilisers and better seeds,” the minister explained how the country is managing inflation.

While comparing the agricultural performance of this year to last year, Musoni said, in season A (from September 2007 to January 2008) agricultural production increased by 14 per cent while in season B (from February to May this year) it increased by 16 per cent.

The other factor that has helped Rwanda to maintain single digit inflation is the strict monitoring of its fiscal spending.

"We try to balance our domestic spending with international spending in form of exports so that the economy isn’t hurt,” the minister said.

Though the general inflation rate by annual average has been kept in single digit, government is yet to meet its annual target of 5 per cent.

The annual average underlying inflation rate which excludes fresh food and energy was 11.9 per cent in June compared to 11.3 per cent in May.

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