Increasing food and beverage prices have further pushed up Rwanda’s annual consumer price index, the main gauge of inflation, a new report has indicated.

According to the National Institute of Statistics of Rwanda (NISR) monthly report, released yesterday, the country’s Urban CPI increased by 6.4 per cent on annual basis up from 3 per cent the same period last year.

On a monthly basis, it creased 0.5 per cent, the report showed.

The statistics body attributes the increase to the rising prices for both food and non-alcoholic beverages which increased by 12.0 per cent.

The upward pressures on food prices started in November 2015 mainly due to the jump in prices for vegetables.

The situation cropped up again in 2016 as vegetables inflation rose from 11.3% in May to 20.2% and 30.8% in June and July 2016, respectively, leading to a hike in food inflation, from 6.1% in May to 9.4% and 13.8% in June and July 2016.

The National Bank of Rwanda (BNR) estimates indicate that in June 2016, non-energy prices rose by 2.1%, mostly driven by agriculture prices which increased by 2.9% due to weaker supply.

Prices went up for beverages by 2.8%, for food by 4.1% while prices for raw materials slid by 0.7% against respective increases of 1.3%, 4.5% and 1.9% in May 2016.

Last month, Rwanda’s main beer and beverages producer, Bralirwa, increased prices for some of its soft drinks for the 30cl and 50cl RGB (glass) products, as well as 30cl PET (plastic).

The 30cl bottle of soda for all its existing flavours now costs Rwf350 up from Rwf300, while 50cl Coca-Cola (glass bottle) was increased to Rwf500 from Rwf450.

This leaves the country’s inflation for housing, water, electricity, gas and other fuels at 3.0 per cent during the month of August, said Lucie Mutetijabiro, the NISR price statistics and research unit team leader.

According to Mutetijabiro, the underlying inflation rate (excluding fresh food and energy) increased by 0.3 per cent when compared to July 2016 and by 4.5 per cent when compared to August 2015.

This means Rwanda’s annual average underlying inflation rate currently stands at 3.1 per cent.

For example, during the first half of 2016, headline inflation evolved around 4.7% on average standing at 5.5% in June and 6.9% in July.

It increased to 4.5% and 4.9% in 2016Q1 and 2016Q2, respectively from 1.0% and 2.0% recorded in 2015Q1 and 2015Q2.

The 2016Q2 increase was mostly reflected in transport inflation, which surged on average from 1.0% in 2015Q4 to 4.6% in 2016Q1 and to 7.3% in 2016Q2.

In addition, food inflation stood at 8.2% in 2016Q1 and 7.0% in 2016Q2 compared to 0.5% in 2015Q1 and 3.1% in 2015Q2.

Core inflation, which excludes fresh products and energy, rose to an average from 2.8% in 2016Q1 to 3.8% in 2016Q2.

editorial@newtimes.co.rw