Summary
- The cost of food items in the inflation basket went up by 10.6 per cent last month, compared to 11.6 per cent in March and April, and a high of 14.8 percent in February.
- The growth in food prices, however, remains high relative to that of other items on the inflation basket, where food carries the highest weight of 32.9 percent.
- Overall inflation last month stood at 5.47 percent, compared to 5.62 percent in April.
Food inflation was lower by a percentage point in May than the
previous month as favourable weather reduced the cost of some food
items. However, supply chain disruptions meant that Kenyans were unable
to benefit fully from the improved production.
Official
numbers show the cost of food items in the inflation basket went up by
10.6 per cent last month, compared to 11.6 per cent in March and April,
and a high of 14.8 percent in February.
The growth in
food prices, however, remains high relative to that of other items on
the inflation basket, where food carries the highest weight of 32.9
percent.
Overall inflation last month stood at 5.47 percent, compared to 5.62 percent in April.
“Despite
the favourable weather conditions the prices of some food items
remained elevated because of the supply disruptions arising from the
Covid-19 containment measures,” Central Bank of Kenya said in its latest
weekly bulletin.
Data from the Kenya National Bureau of Statistics (KNBS) on
inflation for May showed that onions, tomatoes and beans recorded the
biggest price increase per kilogramme year-on-year, while potatoes,
carrots and spinach had the biggest drop.
The price of a
kilo of onions rose by 21.8 percent last month compared to May 2019,
tomatoes went up by 15.9 per cent while a kilo of beans was 10.9 per
cent costlier.
On the other hand, carrots saw a price
drop of 22.5 percent, spinach by 16.8 percent and Irish potatoes by 10.5
percent year-on-year.
The sharp rise in food inflation
in recent months has, however, contrasted with that of the other
categories of measuring the cost of living.
Last month,
fuel inflation stood at three per cent, while non-food-non-fuel (core)
inflation was 1.8 per cent, respectively reflecting low global crude
prices and muted demand-side pressure in an economy where purchasing
power has been eroded by the income losses associated with the Covid-19
disruption.
As a result, private sector players, banks
and analysts expect Kenya’s inflation to remain within the preferred CBK
target of five percent plus or minus 2.5 percentage points for the rest
of the year.
Respondents polled in CBK’s market perceptions survey of March expect inflation at between 6.0 and 6.3 percent this year.
Banks and microfinance banking institutions projected 6.1 percent in the next year, while non-bank firms see it at 6.3 percent.
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