Rwanda’s inflation for the month of January eased to 7.81 per cent from 8.34 per cent, the previous month, the National Institute of Statistics of Rwanda announced yesterday in Kigali.This gives a general inflation rate by an annual average of 6.2 per cent during the month of January 2012.The central bank projects inflation rate to be at 7.5 per cent in December this year. However, the International Monetary Fund (IMF) predicts the country’s inflation in 2012 to rise due to uncertainties in the global economy and further price shocks. "The underlying inflation rate which (excluding fresh food and energy) decreased by 0.26 per cent compared to the previous month and increased by 7.06 on annual change,” NISR observed. "Rwanda’s economy in 2011 is poised for high growth—but also high inflation—with elevated risks for 2012. While strong agricultural output and exports are driving high real Goss Domestic Product (GDP) growth, aggregate demand pressures are also building up and have already pushed up core inflation,” IMF said in a recent economic performance under the Policy Support Instrument (PSI) review. "The decrease in the consumer price index of 0.35 per cent is attributable primarily to the decrease in food and non-alcoholic beverages (0.09), housing, water, electricity, gas and other fuels (1.29) and transport (1.31),” the statement noted. Growth is expected to slow in 2012, although risks could bring lower growth and higher inflation, according to IMF.The IMF urges reforms efforts will have to be stepped up to boost growth prospects."The authorities have begun to tighten monetary policy in late 2011 to contain inflation. However, further tightening may be needed in 2012 to prevent the erosion of recent gains in macroeconomic stability,” the IMF said. It is noted that the decrease of 0.09 per cent in prices of food and non alcoholic beverages is primary attributable to the decrease of 0.86 per cent of vegetable prices.In annual change, the increase in the general index of 7.81 per cent is mainly due to the rising prices of food and non alcoholic beverages (12.75 per cent), housing, water, electricity, gas and other fuels(5.40 per cent), transport (7.82 per cent) and education (8.96 per cent), which contributed +4.41, +1.17, +1.04 and +0.34, respectively. Local goods increased by 7.78 on annual change with a monthly change of -0.37, while prices of the imported products increased by 7.93 on annual change with a monthly change of -0.24. The prices of the fresh products had a positive annual change of 11.39 between January 2012 and January 2011.In January 2012, the overall general index is established at 108.9. This stands for a decrease of 0.85 per cent over the previous month that stood at 109.8. The annual change increased by 8.28 per cent compared to 7.35 per cent in the previous month.