Burundi inflation hits 8% in July as political unrest persists

Kigali - Burundi's inflation rose to 8% year-on-year in July from 7.7% in June as a political crisis in the country drove up costs for all essentials, notably for housing, water and energy, official data showed on Friday.

The landlocked east African nation has been in crisis since late April when its president, Pierre Nkurunziza, decided to run for a third-term, which his opponents and Western countries said broke a peace deal that ended an ethnic civil war in 2005.

From then, dozens of people have been killed during months of street protests, while at least 181 000 citizens were forced to flee to neighbouring countries.

The unrest has negatively affected economic activity in the capital city, Bujumbura.

Inflation for housing, water and energy rose to 5.0% in the year to July from 4.2% in June, the country's Institute for Economic Studies and statistics (ISTEEBU) said in its report.

Economic analysts see a worsening economic situation in the future, as the country's aid-dependent runs a risk of no longer benefiting aid from its key Western donors.

Belgium, German and Netherlands which have already announced their intention to stop funding Burundi, saying elections which led Nkurunziza and his ruling CNDD-FDD party to a sweeping victory were not credible.

The United States, another biggest donor which supports the coffee producer nation in the health, agriculture and military sectors, warned it will cut some aid.

Nkurunziza was sworn in on August 20 for another five-year term in office and appointed a new cabinet this week, with some five members from an opposition coalition led by former rebel leader, Agathon Rwasa.

But still, Burundi's donors urged him to engage an inclusive dialogue with the opposition and civil society, to end the unrest and prevent the country from another civil war.