Kenya’s monthly inflation slowed by 0.1 per cent to 7.9 per cent in June from the previous month due to the high cost of food and non-food items.
The latest Kenya National Bureau of Statistics (KNBS) Consumer Price Index (CPI) and inflation rate for June show that inflation dropped from 8 per cent in May.
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According to KNBS, “The inflation was largely due to increase in prices of commodities under Food and Non-alcoholic beverages (10.3 per cent) and Housing, Water, Electricity, Gas and other fuels (9.4 per cent) between June 2022 and June 2023,” KNBS stated.
In the period, prices of carrots, onions, tomatoes, and maize grain-loose went up by 9 per cent, 7.3 per cent, 6.4 per cent, and 5.5 per cent respectively.
However, potato, avocado, kale, and cabbage costs declined by 6.1 per cent, 4.6 per cent, 2.7 per cent, and 0.3 per cent respectively.
Besides the drop, market analysts observe that new taxes in the 2023/24 fiscal year will hurt households.
“Beginning July 2023, the impact of the new taxes as well as the upward revision of electricity charges in April 2023 will keep the overall inflation rate sticky at the current high levels,” said NCBA analysts.
“Notably, electricity has a weight of 1.27 per cent to the total inflation rate. To be sure, the tax measures introduced in the Finance Act 2023 have diverse implications on the household tax burden levels.”
The Central Bank of Kenya says overall inflation is expected to remain elevated in the near term, mainly due to the increase in electricity prices and the removal of the fuel subsidy.
“Additionally, a mini-survey of the agriculture sector conducted in the first half of June 2023 revealed that prices of some key food items particularly sugar and maize remain elevated,” the CBK said.
“Given the actions that we are now taking, we do expect that by August earliest and latest by September, the overall rate of inflation to come to below the upper range of 7.5 per cent,” Governor Kamau Thugge said on Tuesday.