Food prices push up January inflation to 6.9%
In January, Kenya experienced a marginal increase in inflation to 6.9 percent, primarily attributed to a surge in food prices. This follows two consecutive months of declining inflation in November and December, which eased to 6.6 percent in the last month of 2023.
The Kenya Bankers Association, earlier this week, urged the Monetary Policy Committee, set to convene on February 6th, to maintain the benchmark lending rate at 12.5 percent, citing easing inflationary pressures.
While there are expectations of a forthcoming reduction in fuel inflation, fueled by two successive domestic pump price cuts in November and December 2023, the current scenario underscores the immediate challenges faced by consumers.
More funds for food budget
According to the latest statistics from the Kenya National Bureau of Statistics (KNBS), consumers in Kenya are grappling with the need to allocate more funds for basic food items.
In January, increases in the costs of food, energy, and transportation, accounting for approximately 57 percent of household budgets, significantly contributed to the uptick in inflation.
The KNBS food and non-alcoholic beverages index rose by 0.4 percent from December 2023 to January 2024. The primary driver of this increase was the surge in the prices of certain food items, surpassing the declines observed in other commodities.
Between December 2023 and January 2024, prices for Irish potatoes, carrots, oranges, and cabbages increased by 10.0, 7.4, 3.1, and 1.7 percent, respectively. Conversely, mangoes, tomatoes, and sugar saw price decrease of 3.8, 3.6, and 2.2 percent.
Moreover, the index for housing, water, electricity, gas, and other fuels grew by 1.6 percent during the same period. This was primarily driven by increases in the prices of 200 kWh and 50 kWh of electricity, rising by 11.4 percent and 13.7 percent, respectively.
Read also: Alarm for HIV and AIDS patients as donor funding dries up
Forex rate fluctuation
The foreign exchange rate fluctuation adjustment per kWh contributed significantly to this increase, rising by 103.1 percent.
While the price of a liter of kerosene dropped by 2.4 percent during the same period, the Transport Index experienced a 0.9 percent decrease. This decline was mainly due to reductions in the prices of petrol and diesel by 2.3 percent and 2.5 percent, respectively.
Year-on-year, the overall Index increased by 10.6 percent in the last 12 months leading up to January 2024. Notably, the year-on-year inflation for education services, following a normal seasonal trend, stood at 2.8 percent.
There was a specific increase of 1.8 percent in the indices for education services between December 2023 and January 2024, attributed to a rise in tuition fees, as reported by KNBS.
