Rwanda’s March CPI climbs to 4.2%

Rwanda's consumer prices saw a notable increase in March 2024, with a year-over-year climb of 4.2% compared to the same month in 2023. The monthly jump of 1.1% from February to March has raised concerns among experts and analysts regarding the trajectory of inflation in the country. To delve into the underlying drivers of these numbers, CNBC Africa's Tabitha Muthoni sat down with Ivan Murenzi, the Deputy Director General of the National Institute of Statistics of Rwanda. Murenzi shed light on the fluctuation trend in inflation rates over the past year, highlighting a significant shift from the high inflation period experienced from March 2022 to October 2023. This period was characterized by elevated food prices and supply chain disruptions, leading to imported inflation. However, a positive turn came with the successful agricultural seasons of Season A, from September to January, resulting in decreased food prices and stabilizing inflation rates. The rural areas of Rwanda witnessed a decrease in prices year over year by 1.7%, primarily influenced by reduced food crop costs. In contrast, urban centers experienced a 4.2% inflation increase, driven mainly by rising transportation expenses following the government's decision to remove subsidies on public transport. Transportation costs marked a significant surge, escalating by 14.8% year over year and 6.2% month over month, due to the combined impact of subsidy removal and fuel price hikes. Murenzi emphasized that this inflationary trend in transportation is likely to persist throughout the year, affecting a substantial portion of the urban population. Analyzing the moderate annual inflation rate of 0.6% and a slightly higher monthly rate of 0.7%, Murenzi refrained from making future predictions but emphasized the pivotal role of food prices in driving inflation. With over 50% of household expenditures allocated to food, any significant fluctuations in food prices could lead to notable changes in the inflation landscape. The Statistics Office in Rwanda continues to monitor evolving factors and publishes key drivers of inflation in its reports. As Rwanda navigates these inflationary challenges, stakeholders will closely watch the performance of key sectors like agriculture and transportation to gauge the future trajectory of consumer prices in the country.