Inflation holds steady in August

By Wainaina Wambu

Brian Kamanda displays fresh produce at his stall at the Kisii Municipal Market on August 18. The price of such food items fell slightly last month. [Sammy Omingo, Standard]

Kenya’s inflation rate remained unchanged the second month running on falling food prices even as fuel and housing costs shot up.

The Kenya National Bureau of Statistics (KNBS) data released yesterday showed the August year-on-year inflation rate held at 4.36 per cent, the same as July’s. Since April, as measures to curb the spread of Covid-19 intensified, the Consumer Price Index (CPI) has been easing even as the pandemic continues to hurt incomes.

The CPI, which rose by 0.2 per cent from 108.35 in July to 108.57 in August, measures the percentage change in the price of a basket of goods and services consumed by households

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According to KNBS, the food and non-alcoholic index fell by one per cent even as food year-on-year inflation rose by 5.43 per cent in August. Food products carry the heaviest weight in the consumer basket. “This resulted from decreases in prices of several food items, outweighing the increases,” said KNBS in its monthly CPI update. The food items whose prices dropped include onions, tomatoes and spinach at 16.38 per cent, 12.05 per cent and 7.51 per cent respectively. The prices of beans, mangoes and peas increased by 2.17, 5.16 and 7.42 per cent, respectively.

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August saw housing, water, electricity and other fuel’s index go up by 1.24 per cent.

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“This was mainly attributed to an increase in the cost of electricity and kerosene by 0.52 per cent and 27.38 per cent, respectively,” said KNBS. The rise in fuel prices also saw transport costs for many Kenyans shoot up. “The Transport Index increased by 2.11 per cent over the same period, mainly due to increase in the pump prices of diesel and petrol by 2.97 per cent and 3.41 per cent respectively,” said the statistician. In February, the inflation rate stood at 7.17 per cent and fell to 4.59 per cent in June, attributed to a fall in food prices.  The Kenyan inflation rate has over the years averaged at about five per cent.

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In July, The National Treasury maintained the inflation target range at 2.5 per cent for the ninth consecutive year, despite external shocks caused by the pandemic.