March 18, 2016 / 7:04 AM / 2 years ago

Burundi’s inflation rises to 6.7 pct in February

KIGALI (Reuters) - Burundi’s year-on-year inflation rose to 6.7 percent in February from 6.3 percent in January due to rising costs of some food items in the nation that is facing a deep political crisis, official data showed on Friday.

Tea which has been packaged for export is stacked at the Teza tea factory in Bukeye commune, Muramvya province, Burundi April 23, 2015. REUTERS/Thomas Mukoya

Inflation rate for food in the year to February was 10.9 percent up from 9.6 percent in January, the country’s Institute of Economic Studies and Statistics (ISTEEBU) said in its report.

The country, which relies heavily on aid and on exports of tea and coffee, is facing one of its worst crises since a civil war ended in 2005. The economy shrank by an estimated 7.2 percent last year.

Burundi’s Finance Ministry earlier said the economy should expand by 3.5 percent this year, but is would hinge on improved security and a revival in economic activity.

The European Union announced on Monday that it had suspended direct financial support for Burundi’s government because it had not done enough to end a political crisis and violence in which more than 400 people have died.

The EU had allocated an estimated 432 million euros for Burundi, to be disbursed between 2014-2020, to support energy, rural development, public finances, heath and justice reform.

Analysts say the aid suspension is a blow to the fragile economy already affected by several months of violence. The crisis was triggered by President Pierre Nkurunziza ‘s decision to run for a third term, which he went on to win.

His opponents say, his third term violates the constitution and a peace deal that ended a civil war. The government cites a court ruling that said he could stand again.

The EU said it would resume aid once the authorities engaged in an inclusive political dialogue, addressed concerns about human rights abuses and dealt with other issues.

Reporting by Patrick Nduwimana; Writing by Edmund Blair; Editing by Simon Cameron-Moore

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