Drought effects push inflation rate to 18-month high


Drought effects push inflation rate to 18-month high

In Summary

  • The inflationary pressures are attributable to the effects of drought arising from the delayed onset of the long-rains season which led to a notable hike in food commodity prices.
  • The onset of the long-rainfall in the latter half of the month is however expects to ease inflation fears even as the agriculture and allied sectors prices the cost to the delayed rainfall-onset.
  • In spite of the notable surge to the inflation rate, the measure remains anchored within the 2.5 to 7.5 percent targets by government under its medium term plan which seeks to keep inflationary pressures in check under ongoing fiscal consolidation.

The Kenya National Bureau of Statistics (KNBS) has released its monthly consumer price index for the month of April quoting inflation at 6.58 percent.

The revised price-pressure index is a marginal surge from the 4.35 percentage points posted in March and represents the highest inflation rate in 18 months since September 2017 when the hike in consumer prices topped 7.06 percent.

The inflationary pressures are attributable to the effects of drought arising from the delayed onset of the long-rains season which led to a notable hike in food commodity prices.

“Between March and April 2019, the food and non-alcoholic drink’s index increased by 6.86 percent. This increase was mainly due to drought conditions which prevailed in the better part of April 2019 causing an upsurge in the costs of some food stuffs,” noted the KNBS monthly consumer price survey.

A 2 kilogram of sifted maize flour for instance rose to an average of Ksh.112.26 in a month from Ksh.86.47 in March, this also as the price of a kilo of kale increased by Ksh.13.41 to Ksh.66.40.

The price of a kilo of sugar, however, eased by 12.6 percent to Ksh.102.55 as did the price of a kilo of cooking oil and a 13-kilo Liquified Petroleum Gas (LPG) cylinder whose cost eased to Ksh.2184.85.

The hike in food prices whose weighted cost on the CPI index averages at over 30 percent hence resulted in a significant bearing on the average inflation rate during the month of April.

Further to the biting drought, the transport index tightened by 0.86 percent as the costing to petroleum products continued to head north reflecting on prevailing crude prices in the international market.

The price per litre of all the three basic petroleum products — petrol, diesel and kerosene — expanded by an average of 5.3 percent, 5.8 and 2.2 percent respectively in the mid-month review to maximum retail pump prices by the Energy and Petroleum Regulatory Authority (EPRA), to further heighten the inflationary pressures.

The onset of the long-rainfall in the latter half of the month is however expected to ease inflation fears even as the agriculture and allied-sector prices the cost to the delayed rainfall-onset.

In spite of the notable surge to the inflation rate, the measure remains anchored within the 2.5 to 7.5 percent targets by government under its medium term plan which seeks to keep inflationary pressures in check under ongoing fiscal consolidation.

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Story By Kepha Muiruri
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