The prices of goods and services increased by 13.7 per cent in June 2022 compared to the same month last year, and 0.8 per cent increase on a monthly basis, according to National Institute of Statistics (NISR). The report released on July 10 indicates that prices of food and non-alcoholic beverages increased by 25.1 per cent while housing water, electricity, gas and other fuels increased by 7.9 per cent. Transport also increased by 11.5 per cent and prices in restaurants and hotels increased by 14.3 per cent. The Consumer Price Index is one of the leading economic indicators of inflation as it calculates the change in cost on a basket of consumer goods and services purchased by households over time. It is calculated over a household basket that includes 1,622 products sold in many places spread all over the country, according to NISR. On an annual basis, the local goods index increased by 12.6 per cent and the imported goods index increased by 16.9 per cent, while the fresh products index increased by 22.2 per cent, the energy index increased by 18.2 per cent. Commodity prices have been steadily rising over a half year now mainly due to imported inflation as an impact of disrupted global supply chain and economic spillovers of the Russia-Ukraine war. In efforts to keep inflation in check, the Central Bank maintained the key repo rate at 5 per cent and explained that the results may not be immediate but will reflect change over time. The key repo rate is the Central Bank’s lending rate to commercial banks and it is increased to reduce the supply of money in the market. It is predicted that 2022 average inflation should be up to 9.2 per cent before coming down to 7.5 per cent next year. With the new national budget of Rwf4.6 trillion for the 2022/23 fiscal year, parliamentarians are optimistic that it will help tame the rising commodity prices and boost economic growth of the country.
