November 22 2012; Minister of Finance and Economic Planning John Rwangombwa, along with the Governor of Central Bank Ambassador Gatete Claver, appeared before the Senate to explain the state of inflation and price fluctuations in Rwanda.
Speaking to members of the Senate, Minister Rwangombwa said that inflation has been kept at moderate levels during the first nine months of 2012. This is due to efficient monetary and fiscal policies, along with easing inflationary pressures in the region.
Annual headline inflation has decreased to a current rate of 5.4%. This is compared to 5.9% in June 2012 and 8.3% in December 2011. Rwandan inflation mainly results from food and oil prices as the country is vulnerable to climate conditions and international market conditions.
Production figures from the Ministry of Agriculture for the six main food groups show an overall increase. Maize production is up by 47.7%, rice by 8.3%, beans by 15.1%, sweet potatoes by 26.8%, potatoes by 33.1%, cassava by 19.8%, banana by 14.3%. Sorghum however decreased by 55.6%. In 2012 total agricultural production increased by 20.7% compared to 2009 due to the crop intensification program (CIP) and the use of improved seeds.
Senators posed questions on what the government is doing to curb an increase in inflation.
'During the first nine months of 2012, inflation has been kept at moderate levels thanks to efficient monetary and fiscal policies, as well as easing inflationary pressures in the region.'
'Core inflation, which excludes highly volatile prices (energy and fresh food), has been declining from 8.3% in December 2011 to 5.3% in March 2012, 3.6% in June and 2.5% in October 2012.' Minister Rwangombwa said.