Rent, food prices fall drives down inflation

A rare drop in rent and fall in selected food prices pulled down inflation rate to its lowest since February. FILE PHOTO | NMG 

By JOHN MUTUA
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Summary

• A rare drop in rent and fall in selected food prices pulled down inflation rate to its lowest since February when Kenya reviewed the goods used to calculate the cost of living measure.
• The Kenya National Bureau of Statistics (KNBS) data shows that inflation rate dropped to 4.36 per cent from 4.59 last month as households enjoyed a fall in the cost of basic commodities.
• The data shows that rent prices dropped by 0.52 per cent to Sh6,264. 65 from Sh6,297. 53 for the cost of a double room as property owners cut prices to match falling demand occasioned by job losses and reduction in earnings due to the coronavirus.

A rare drop in rent and fall in selected food prices pulled down inflation rate to its lowest since February when Kenya reviewed the goods used to calculate the cost of living measure.

The Kenya National Bureau of Statistics (KNBS) data shows that inflation rate dropped to 4.36 per cent from 4.59 last month as households enjoyed a fall in the cost of basic commodities.

The data shows that rent prices dropped by 0.52 per cent to Sh6,264. 65 from Sh6,297. 53 for the cost of a double room as property owners cut prices to match falling demand occasioned by job losses and reduction in earnings due to the coronavirus.

Property owners and landlords have also opted to offer relief to Kenyans hard-hit by the coronavirus pandemic, further pulling down rental prices.

Food products that carry the biggest weight in the inflation basket dropped by 0.80 per cent providing relief to households grappling with reduced earnings due to the coronavirus pandemic.

“Prices of tomatoes, potatoes, spinach, onions and kales (sukuma wiki) registered decreases… during the review period, housing, water, electricity and other fuels decreased by 0.36 per cent,” KNBS said Thursday.

The price of one kilogramme of tomatoes fell to Sh96.19 from Sh101.79 last month, a drop of 5.5 per cent followed by one kilogramme of potatoes that dropped by 4.09 per cent to Sh65.23 from Sh68.01 last month.

The State has relaxed restrictions imposed to curb spread of the coronavirus disease easing supply hitches that hit the country from March. This is in addition to favourable rains that have led to increased productivity.

Food carries the biggest weight under the new measurement at 32.91 per cent, followed by housing, water and other fuels at 14.61 per cent.

Inflation rate has been on sustained drop from 6.01 per cent in April, a month after Kenya changed the commodities used to review the changes in cost of living.

Under the new inflation measurements, KNBS increased the commodities to 330 from 234 and doubled the data collection zones from 25 to 50.

Kenyans’ expenditure patterns are a reflection of the increase in urbanisation and expansion of the middle class.