Kenya’s inflation eases to 14-month low on food costs drop
Tuesday August 01 2023
Kenya National Bureau of Statistics Director General Macdonald Obudho. PHOTO | EVANS HABIL | NMG
Kenya’s inflation rose by the slowest pace in nearly one and a half years in July on moderate price pressure on basic food items, the statistics agency reported Monday, defying a jump in fuel-induced transportation costs.
Inflation — a measure of the cost of living over the last 12 months— eased to 7.3 percent from 7.9 percent in June, the Kenya National Bureau of Statistics (KNBS) reported.
The rate of annual growth in average prices of goods and services was the slowest since May 2022 (7.1 percent).
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It also marked the first time the rise in the cost-of-living measure has fallen back to within the Central Bank of Kenya’s target range of between 2.5 and 7.5 percent in 14 months.
The July number shows signs of high inflation easing after being largely pressured by a debilitating drought and high cost of farm inputs such as fertiliser that hit food production and sent prices through the roof from last year. More pressure has come from energy costs that remain elevated.
Moderating rises in average food prices made the largest downward contribution to the overall drop in inflation, according to the KNBS data.
The average price of food rose 8.6 percent compared with 10.3 percent in June, the first single-digit growth in annual food costs since March 2022.
“Prices of most food products dropped [month-on-month] during the period,” KNBS Managing Director Macdonald Obudho said in a statement.
He cited Irish potatoes, tomatoes, cowpeas and cabbages whose costs fell 12.2, 10.1, 8.3 and 8.1 percent in July compared with June following the end of a long rainfall season from March to May.
“However, during the period, the price of onions [leeks and bulbs] increased 11.4 percent,” Mr Obudho added.
The KNBS did not include sugar in the goods sampled.
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The cost of transportation, however, rose at a sharper pace of 13.3 percent in July from 9.4 percent in the prior month largely on the impact of the doubling of value-added tax on fuel to 16 percent in the Finance Act.