Kenya’s cost of living measure eased in July to a 13-month low on moderation of select food prices and drop in energy costs.
This saw inflation drop below the governments threshold for the first time in almost 13 months boosted by a reduction in housing, water electricity and gas.
The index dropped to 7.3 percent from 7.9 percent in June, a 60 basis points drop as the country’s inflation eased to fall within the Central Bank's target band.
Central Bank of Kenya's preferred inflation band stands at between 2.5 percent to 7.5 percent in the medium term.
The easing inflations comes just a month after, the central bank raised its benchmark lending rate to 10.5 percent, from 9.5 percent previously, citing sustained inflationary pressure.
According to data by Kenya National Bureau of Statistics, this is the largest year-on-year decline reported by LPG at 10.1 percent, followed by tomatoes at 9.8 percent with matatu fares posting the steepest increase at 40.0 percent.
In the period under review the month-to-month Food and Non-Alcoholic Beverages Index decreased by 0.5 per cent between June 2023 and July 2023 bringing a sigh of relief to Kenyans who have continued to grapple with high food prices.
“The Housing, Water, Electricity, Gas and Other Fuels' index, decreased by 1.2 per cent between June 2023 and July 2023,” said KNBS in a statement.
The drop has majorly been attributed to a decline in the prices of cooking gas (LPG) and electricity.
During the review period, the prices of 13Kg gas, electricity 200 kilowatts and electricity 50 kilowatts decreased by 9.2, 5.3 and 4.4 per cent, respectively, between June 2023 and July 2023.
Compared to July 2022 the price of a 13KG cooking gas dropped to from Sh3,100 to Sh2,787 in July of 2023.
The rise in kerosene by 5.0 per cent however, did little to weigh down inflation.
The price fluctuations in food, energy, and transportation, which together account for nearly 57% of family budgets, were significant contributions to the drop.
“The Transport Index went up by 3.5 per cent between June 2023 and July 2023 mainly due to increase in prices of petrol and diesel, which rose by 6.9 per cent and 7.4 per cent, respectively,”
The drop comes as a timely relief at a time that Kenyans have been suffering from surging prices, as well as a sharp drop in the local shilling against the US dollar that has spiked costs of commodities.
However, with the finance act set to be implemented Kenyans should brace for a tighter economy.
){kind=link}
