Burundi's year-on-year inflation rate dropped to 4.8 percent in January from 6.3 percent in December partly due to lower housing, water and energy costs, official data showed on Wednesday.

The housing, water and energy index decreased by 1.8 percent over the 12 months to January, from 4.6 percent in December, Elie Ndiririkirirenza, an official at the Institute of Economic Studies and Statistics (ISTEEBU), told Reuters.

ISTEEBU fears that prices of most essential commodities will climb this year with rising global oil prices.

The landlocked country's government raised fuel prices earlier this month, the fifth increase since mid 2010.

The average annual inflation rate fell to 6.5 percent last year from 10.5 percent in 2009, helped by lower food prices, especially for rice, the main staple in the coffee producing nation of 8 million.

The International Monetary Fund expects Burundi's 2011 inflation rate will reach 8 percent and projects economic growth of 4.5 percent from 3.9 percent in 2010.