Tomatoes traders wait for customers at Nakuru's Wakulima Market. PHOTO | AYUB MUIYURO | NMG
Inflation in December dropped to a 55-month low of 4.5 per cent,
helped by softening food prices, as analysts project that the key index
will fall further in the first half of 2018.
This marks the fourth drop in a row from 4.73 per cent last month and 8.04 per cent in August, where it stood above the government’s preferred ceiling target, hurting low income homes.
“The
year on year food inflation dropped from 5.79 per cent in November to
4.68 per cent in December 2017,” the Kenya National Bureau of Statistics
(KNBS) said in a statement Friday.
The slowdown in
the cost of living measure comes amid government subsidies on maize
flour, Kenya’s staple, in the wake of a biting drought that pushed up
prices, prompting State intervention.
The government has however announced that the six-month import
subsidy will come to an end this week, meaning prices are set to go up
again in the New Year.
Main driver
Food takes up the largest share (36 per cent) of the basket of
goods that is used to calculate inflation, making it the main driver of
the cost of living, followed by utilities such as rent, water,
electricity, gas and fuels at 18 per cent.
Some food
items that recorded drops in December include tomatoes and sugar while
chicken, fish and beef rose in the festive month but the impact was
cancelled out by drops in the other food prices.
KNBS
said transport costs were on the climb, in response to rising fuel pump
prices and operators hiking fares over the holiday, but had a minimal
impact on households’ budgets.
At 4.5 per cent, the
December inflation is within the Central Bank of Kenya (CBK) preferred
range of between 2.5 per cent and 7.5 per cent.
It’s the lowest level since May 2013 when it stood at 4.05 per cent.
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