Inflation rate drops to 7.06 pc

Year-on-year inflation slowed by 98 basis points to 7.06 percent this month fueled by lower cost of electricity and food items.

This means the rate of inflation is now back within the government’s target band of between 2.5 to 7.5 percent. During the month, the Food and Non-Alcoholic Drinks’ Index reduced by 1.28 percent on account of double digit in the prices of carrots and cabbages.

Food takes up the largest share of 36 percent of the basket of goods that the Kenya National Bureau of Statistics uses to calculate the rate of inflation.

This makes the cost of food the main driver of the cost of living. This month, the price of carrots reduced by the highest percent of 31.88 percent to 66 shillings and 50 cents a kilo followed by cabbages whose cost was lower by 13 percent to 46 shillings and 58 cents per kilo.

There were also notable single-digit reductions in the price of Irish potatoes, sugar, sukuma wiki, maize grain and flour.

Despite increases in the prices of beef, spinach, onions and tomatoes, the spike was not as high as price reductions of other food items, hence resulting in a 1.28 percent reduction in the Food and Non-Alcoholic Drinks’ Index.

Lower prices of food items this month helped push down food inflation by 2.07 percent to 11.5 percent.

During the month, there was a reprieve for households and business after the cost of electricity reduced with the cost of up to 50 kilowatt hour reducing 10 percent to 581 shillings and 79 cents while the cost of 200 kilowatt hour was down 7.07 percent to 3,665 shillings and 54 cents.

Even though there was a notable increase in the cost of petroleum products, rent and charcoal, the upsurge was not big enough to offset the overall reductions, pushing down the year on year rate of inflation to 7.06 percent, down from 8.04 percent recorded last month.

  

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