Rwanda Achieves Significant Inflation Reduction in 2024

Rwanda’s inflation rate fell to 4.8 percent in 2024 from 14.0 percent in 2023, attributed to strong agriculture, lower commodity prices, and strict monetary policies. Governor Hakuziyaremye forecasts a stable inflation outlook, predicting 6.5 percent for 2025.

In 2024, Rwanda’s inflation rate significantly decreased to 4.8 percent from 14.0 percent in 2023, as reported by Central Bank Governor Soraya Hakuziyaremye. She credited the significant drop to robust agricultural performance domestically, a reduction in international commodity prices, and the implementation of stringent monetary policies by the bank. Furthermore, government initiatives aimed at lowering essential goods prices also played a vital role in this reduction.

The notable decline in inflation suggests enhanced economic stability and an increase in consumer purchasing power, which experts agree can stimulate investment and economic growth. With lower inflation, businesses may experience reduced costs, supporting a rise in disposable income for households and fostering overall economic confidence. Yet, Hakuziyaremye cautioned against a temporary increase in inflation observed at the start of 2025, where rates reached 7.4 percent, attributing this spike to a base effect post the strong agricultural harvest of late 2024.

Despite the upward trend, inflation rates moderated to 6.3 percent by February 2025. Hakuziyaremye expressed optimism about maintaining inflation within target ranges, forecasting 6.5 percent for 2025 and 4.1 percent in 2026. Nevertheless, she warned of risks that require diligent monitoring, including escalating regional and global tensions that may threaten economic stability, along with adverse weather conditions impacting agricultural productivity.

In summary, Rwanda’s inflation has significantly decreased in 2024, contributing to improved economic stability and purchasing power for its citizens. While short-term fluctuations were noted, the outlook remains positive with inflation projected to stabilize in the coming years. Nevertheless, vigilance against potential economic risks is necessary to ensure continued financial stability.

Original Source: www.newtimes.co.rw