Local producers saw a price decrease of 5.4 per cent in July compared to the same period last year, fueled by a decrease in prices of manufacturing activities, according to the latest Producer Price Index (PPI) published by the National Institute of Statistics of Rwanda (NISR).
The Producer Price Index (PPI), released on August 31, measures the average change over time in prices received by domestic producers to produce their goods and services for local sales and exports.
PPI survey covers a sample of 114 establishments and 402 products spread countrywide by NISR and the National Bank of Rwanda. This is a measure of inflation from the producers’ perspective.
On a monthly basis, PPI increased by 0.8 per cent from June where it had dropped by 4.4 per cent. This is the first monthly increase recorded in six months.
According to the statistics, the index reached an all-time high of 8.20 per cent in February of 2019 and a record low of -5.30 per cent in July of 2022.
The industries that comprise the PPI include mining, manufacturing, natural gas, electricity, construction, waste, information and communication.
While prices in other industries remained unchanged, general prices of manufacturing activities decreased by 6.9 per cent and prices of mining increased by 1.5 per cent.
Locally, the producer prices in manufacturing decreased by 9.1 per cent while the export prices decreased by 1.3 per cent in July compared to the same month of 2023, mainly driven by a decrease of 5.2 per cent in prices of coffee products.
On the other hand, the prices of tea increased by 4.1 per cent while mining increased by 1.5 per cent.
The Producer Price Index looks at inflation from the viewpoint of industry and business, meaning that it looks at price changes before consumers purchase final goods and services.
Therefore, it is an economic indicator that can be used to predict inflation before the Consumer Price Index –consumer prices that indicate the cost of living.
In July, CPI rose by 4.9 per cent year-on-year in July and decreased by 0.1 per cent from the 5 per cent recorded in June.