Rwanda Inflation Hits 17.2%: Vegetable Prices Push Urban Food Costs Up 20.9%Rwanda Inflation Hits 17.2%: Vegetable Prices Push Urban Food Costs Up 20.9%

The National Institute of Statistics of Rwanda (NISR) said in its September consumer price report that the urban index rose 2.7% between August and September. A year earlier, the annual urban rate stood at 7.3%.

For Kenyan exporters and traders who sell into Kigali, the jump matters because it shows how quickly household purchasing power is being squeezed in one of the East African Community's busiest import markets.

Food drives the climb

Food and non-alcoholic beverages recorded the steepest pressure. NISR reported that the group rose 20.9% year on year and 5.3% on the month, with vegetables alone up 35.1% over the year.

Housing, water, gas, electricity and other fuels rose 18.3% annually but only 0.1% in September. Transport costs were 22.4% higher than a year earlier and rose 0.2% on the month. Restaurants and hotels were up 18.9% on the year and 2.8% on the month.

The pattern shows that the September acceleration came mainly from food, while housing and transport barely moved month on month. NISR's report does not say what caused the vegetable price rise, so the drivers behind it remain unconfirmed.

Core prices are rising too

Core inflation, which excludes fresh food and energy, stood at 11.4% in September, with a monthly change of 1.3%. NISR put the average annual core rate at 10.5%. A core reading that high means the price rise is not confined to volatile items.

The institute also published broader measures. National CPI inflation was 20.0% year on year, with a monthly rise of 5.0%, while rural CPI stood at 22.0% annually. NISR notes that the urban index is the one used for the official inflation rate. Average annual urban inflation stood at 11.5%.

How Kenya compares

Kenya's own picture is calmer. The Central Bank of Kenya held its benchmark rate at 8.75% on 7 October, and inflation was 6.8% in September, according to the bank's Monetary Policy Committee statement.

Mwenendo earlier reported on how Kenyan banks disbursed record loans as credit conditions eased, and as Mwenendo earlier reported, Treasury bill demand surged while yields slipped.

NISR did not give a forecast for October. The next monthly release will show whether vegetable prices ease. Mwenendo also tracks the shilling against the dollar for readers following regional currency pressure.