Food prices offset gains from low energy bills edging up inflation to 5.61pc

Money Markets

A woman sells groceries at Nyeri Municipal Market. Inflation bucked a five-month decline in February, inching up marginally on rising prices of key food items which offset benefits from lower energy bills. PHOTO | FILE 

By NEVILLE OTUKI, notuki@ke.nationmedia.com

In Summary

• Inflation had been dropping since last August when it hit a 25–month high of 8.36 per cent and was cooled by falling electricity and fuel prices.

Inflation bucked a five month decline in February, inching up marginally on rising prices of key food items which offset benefits from lower energy bills.

Data from the Central Bank of Kenya (CBK) shows that the cost of living measure stood at 5.61 per cent in February, up from 5.53 per cent last month.

“The fall in fuel prices was partly offset by a rise in the prices of some food items,” the bank’s monetary policy committee (MPC) said in a report released Thursday.

The committee added that the pace with which inflation inched up fell within its prediction.

The CBK prefers inflation at between 3.5 and 7.5 per cent but seeks to maintain it at five per cent this year.

Inflation had been dropping since last August when it hit a 25–month high of 8.36 per cent and was cooled by falling electricity and fuel prices.

Despite this month’s rise, officials expect future stability in the cost of living measure – which paints a picture on households’ budgets.

“The month-on-month non-food-non-fuel inflation declined from 3.65 per cent to 3.43 per cent during the period, indicating that there were no significant demand-driven inflationary threats to the economy,” said Njuguna Ndung’u, the outgoing MPC chairman.