Burundi’s inflation rises to 5.6 pct in October

KIGALI (Reuters) - Burundi’s year-on-year inflation rate rose to 5.6 percent in October from 4.1 percent in September as prices rose for some food, official data showed on Monday. A rising inflation rate is the latest blow for the violence-racked country. Its economy is expected to contract by about 7.2 percent this year after growing 4.7 percent in 2014, the International Monetary Fund said in October. Daily violence marked by targeted killings and assassinations has affected all sectors of the country’s businesses, especially in the capital, Bujumbura, whose economic activities represent 55 percent of the nation’s output. The violence was set off by President Pierre Nkurunziza's decision to run for a third term in office, which he won in a controversial election in July. Food price inflation rose to 5.4 percent in the year to October from 3.8 percent in September, the Institute of Economic Studies and Statistics (ISTEEBU) said in its report. Economic analysts fear the country's fragile economic situation could worsen if the crisis lasts longer and donors suspend aid. Major donors like Belgium have already cut some aid, following an upsurge of violence and human rights violations committed since April. The European Union, which funds 50 percent of Burundi's annual budget, is threatening to suspend its aid if an expected dialogue with Burundian authorities fails to restore peace and democratic principles. (Writing by Duncan Miriri, editing by Larry King)