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Kenya’s Inflation Touches Four-Month High

The rate of inflation has risen to a four month high fueled by higher cost of electricity and super petrol after the coming into force of a new VAT adjustment regime.

Latest data from the Kenya National Bureau of Statistics indicates that Kenyans paid 3.15 percent more for electricity this month compared to September due to the higher adjusted VAT rates on energy that came into force at the beginning of this month.

The Energy and Petroleum Regulatory Authority early this month revised fuel pump prices to reflect a new VAT adjustment regime that came into force.

The new VAT regime also affected other items including alcoholic, tobacco as well as energy products.

This affected the cost of living this month which rose to a four month high of 4.84 percent, up from 4.20 percent in September and 4.36 percent in both July and August.

This month the cost of electricity rose 3.15 percent, which was the highest among items sampled by the Kenya National Bureau of Statistics.

The higher pump price adjustment at beginning of this month coupled with another increase mid-month by Energy and Petroleum Regulatory Authority saw the cost of super petrol increase 1.72 percent when compared with September levels.

This coupled with increases in the cost of food items such as meat products, carrots, wheat flour and avocado powered up the rate of inflation.

This is despite notable price decreases for items such as diesel, house rent and cooking gas.

Rains experienced in recent weeks has also helped boost production of food produce that has seen prices of cabbages, tomatoes and maize flour reduce.

However, the reductions were not big enough to offset price increases of other sampled items.