Kenya’s cost of living holds steady in August with inflation at 4.36pc


Kenya's cost of living holds steady in August with inflation at 4.36pc
A customer unpacks products from a trolley at the counter inside a supermarket in Nairobi, Kenya April 8, 2019. REUTERS

In Summary

  • The hold the cost of basic consumer items is on the back of an ease to the food and non-alcohol drinks index which decreased by one percent despite a year on year rise in food inflation.
  • Increased fuel costs however saw the the Housing, Water, Electricity and Gas index rise by 1.24 per cent as the cost of electricity and kerosene picked up by 0.52 per cent and 27.4 per cent respectively.
  • The continued cooldown in consumer prices is expected to cushion Kenyans against a higher cost of living as the effects of the COVID-19 pandemic continue to filter through the economy over the near-term.

Kenya’s cost of living held steady in August with inflation remaining flat at 4.36 per cent, the same rate as in July.

The hold the cost of basic consumer items is on the back of an ease to the food and non-alcohol drinks index which decreased by one percent despite a year on year rise in food inflation.

The Kenya National Bureau of Statistics (KNBS) has attributed the decline to greater food costs declines which offset increases during the month.

“The price of onions, tomatoes and spinach registered decreases of 16.38 per cent, 12.05 and 7.51 per cent respectively in August in comparison to July 2020,” the statistics office said in a statement on Monday.

Increased fuel costs however saw the the Housing, Water, Electricity and Gas index rise by 1.24 per cent as the cost of electricity and kerosene picked up by 0.52 per cent and 27.4 per cent respectively.

Moreover the transport index rose by 2.1 per cent as petrol and diesel costs increased by 2.97 and 3.4 per cent respectively.

The low inflation rate is a marker of continued disinflation where broad consumer goods have held in price or declined over time.

The trend was established in March after the inflation rate hit the targeted ceiling of seven percent in February.

The continued cooldown in consumer prices is expected to cushion Kenyans against a higher cost of living as the effects of the COVID-19 pandemic continue to filter through the economy over the near-term.

In July, the National Treasury retained the inflation target at a median five percent for another calendar year as it sets the base on consumer costs as the enabler of its third medium term plan implementation.

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Story By Kepha Muiruri
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