Inflation hits 29pc in November

December 1, 2008
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, NAIROBI, December 1- The cost of living in Kenya has continued to rise mainly due to an increase in the food prices, statistics from the Kenya National Bureau of Statistics have shown.

According to a statement from the Bureau, month on month inflation went up from 28.4 percent in October to 29.4 percent in November. It has been on an upward trend since July this year when it stood at 26.5 percent.

“Food and non alcoholic drinks index rose by 3.1 percent mainly due to an increase in the prices of maize flour and tomatoes among other foods,” said the statement released on Monday.

Food and non alcoholic drinks constitute 50 percent of the Consumer Price Indices (CPI) basket. The average price for a two kilogram packet of maize flour went up by 11.4 percent to Sh91.05, the data that was collected in the second and third weeks of the month under review showed.

This year, inflation hit a high of 31.5 percent in May driven by skyrocketing prices in fuel and food prices. Experts have predicted that inflation rate is likely to remain above 25 percent for the rest of the year.

The report has been released at a time when the country is facing an acute shortage of maize and maize flour which have seen the price of a two-kg packet selling at more than Sh120.

The shortage of the flour which is used to make Kenya’s staple food, Ugali, has forced the government to intervene and pledged to make announcements on the new prices of the grains and flour this week.

During the same period, the fuel and power index however decreased by under one percent driven by a drop in the cost of diesel and petrol.

“The average cost of a litre of diesel decreased from Sh97.97 to Sh90.20 in November. Similarly, the prices of regular and super petrol went down by three and 6.2 percent respectively,” the Bureau said.

The underlying inflation, which excludes food items from the CPI basket declined from 13 percent in October to 12.3 percent in November.

There have been calls for the government to consider reviewing the method of calculating inflation to reflect the true picture on the ground.

The Bureau Director-General Anthony Kilele told Capital Business that they have started to collect data that will be used to compute the new methodology (of inflation).

The new formula, he said, would start using geometric mean instead of the arithmetic mean and would run concurrently for almost a year.

“It’s a process. We cannot switch figures overnight so we’ll have to produce the two methods on a parallel basis and inform the public what is happening,” he explained.

He added that even with the new methodology, they would have to backdate the inflation rates.

Mr Kilele said the revision of the rates was being undertaken worldwide as countries get more items in the CPI basket.

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