This increase marks a notable acceleration in urban inflation, which serves as the headline index for monetary policy decisions.

Despite the annual rise, urban prices experienced a 0.8% decline compared to November 2024, reflecting a slight monthly price relief for urban consumers.

NISR reports that several categories contributed to the annual increase in urban prices. Transport prices saw the largest increase, rising by 17.9%, primarily driven by higher fuel costs and transport services.

The Food and Non-Alcoholic Beverages category experienced a 6.0% increase, with significant price surges in meat (25.4%) and milk, cheese, and eggs (14.6%).

Vegetables rose by 6.9%, although they declined by 8.5% compared to November 2024. Additionally, the cost of Housing, Water, Electricity, Gas, and Other Fuels increased by 4.7%, reflecting sustained demand and higher costs in the utilities sector.

On a broader scale, Rwanda’s overall CPI, which combines both urban and rural areas, rose by 6.4% annually, while the rural CPI increased by 6.2%. However, on a monthly basis, rural prices dropped by 2.1%, contributing to a 1.6% decline in the national index.

The fresh products index, which captures seasonal price fluctuations, surged by 11.3% annually, driven by increased costs for fresh vegetables and other agricultural products. However, it fell by 4.4% on a monthly basis.

The core inflation index, which excludes volatile items like fresh food and energy, rose by 5.8% annually and 0.4% on a monthly basis, indicating sustained price pressure across non-volatile goods and services.

Despite the inflation pressures, Rwanda’s economy demonstrated robust growth throughout 2024, with real GDP increasing by 9.7% in the first quarter and 9.8% in the second quarter, driven by strong performances in the services and industrial sectors.

The third quarter continued this positive trend, with an 8.1% growth rate, bringing the average growth rate for the first three quarters of 2024 to 9.2%.

The International Monetary Fund (IMF) projects Rwanda’s real GDP to grow by 7.0% in 2025, following an estimated 8.3% growth in 2024.

The prices of Vegetables rose by 6.9% in December 2024 compared to the same period in 2023, but declined by 8.5% compared to November 2024.