Kenya Inflation

Kenya’s Inflation Slows to a Six Month Low of 5.8% in November

Kenyan inflation slowed for the second consecutive month in November, reaching a six-month low as food price growth decelerated.

Kenya’s annual inflation rate rose to 5.8% in November, compared to 6.45% recorded in October, Nairobi-based Kenya National Bureau of Statistics said Tuesday in a statement. The median of five economists’ estimates in a survey was 6%. Prices rose 0.45% in the month.

“This was mainly attributed to an increase in prices of some food items, which outweighed the decrease in prices of others,” read a statement from KNBS.

Additionally, the data revealed that the overall Consumer Price Index (CPI) increased by 0.45 per cent from 116.674 in October to 117.203 this month.

Overall, food prices in food prices in November 2021 were relatively high compared with foods prices recorded in November 2020. Of all the selected commodities reviewed, prices of sugar, cooking oil, and potatoes (Irish) increased by 11.94, 5.74, and 3.34 per cent, respectively compared to last month.

However, prices of tomatoes, kales (sukuma wiki), and carrots decreased by 4.00, 1.00, and 0.97 per cent, respectively.

On the other hand, the Housing, Water, Electricity, Gas and Other Fuels’ Index increased by 0.49 per cent between the period under review due to what was attributed to an increase in the prices of cooking gas (LPG) and house rent for single rooms that went up by 3.88 per cent and 0.53 per cent respectively.

The prices of electricity (50 kilowatts) and electricity (200 kilowatts) decreased by 0.39 per cent and 0.29 per cent, respectively.

Inflation which stays inside the Central Bank of Kenya’s target range of 2.5% to 7.5% and is expected to stay within aim in the near term as demand pressures remain muted, Governor Patrick Njoroge said Monday after announcing the decision to keep the benchmark interest rate unchanged at 7%.

A key risk to price growth is unfavourable weather and desert locusts, which could curb the production of food crops and animal feeds, according to the National Treasury. A global rally in prices of wheat, Kenya’s second most important cereal after corn, has resulted in an increase in the cost of bread and pastries.

A looming inflation adjustment of almost 5% on excise duties on items including fuel, fruit juices and alcoholic drinks, will further add to inflationary pressures if the current suspension of the measure by a court ruling is lifted.