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Kenya

Inflation rises above 6pc in February

NAIROBI, Kenya Feb 28 – The steady rise in food prices has pushed inflation to 6.54 percent in February up from 5.42 percent recorded in January.

The increase to the six percent range is above the government target of keeping inflation at below five percent.

Data from the Kenya National Bureau of Statistics (KNBS) shows that the food index during the month grew by 1.74 percent to 36.04 percent forming the largest component of the Consumer Price Index (CPI).

"This was attributed to cost increases recorded in respect of a number of food products such as maize flour, sukuma wiki, spinach, maize grain and cabbages. The prices of these items went up by 8.8, 12.4, 14.8, 6.7 and 4.8 percent respectively," KNBS said in a statement.

With the country currently experiencing dry weather, which is set to run into April, it is expected that pressure on the agricultural sector will nudge inflation levels on expensive food led by maize, wheat and vegetables.

Also putting pressure on inflation is the energy market that is expected to push the cost of living for Kenyans higher.

The transport index rose by 4.36 percent mainly due to an increase in the cost of petrol and diesel that had a bearing on the increase in public service vehicles fares.

According to KNBS, the housing, water, electricity, gas and other fuels index went up by 0.8 percent mainly because of increases in the prices for electricity and housing costs.

"The main contributor to high cost of electricity was the amount charged to offset fuel adjustments which increased from Sh3.82 per kilowatt hour in January to Sh4.67 per kilowatt hour in February," the statement added.

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The rise in inflation levels has certainly caught the attention of the Central Bank, which had already scoffed January\’s 5.42 percent rate, associating it with one-off price adjustments such as increased rent and school fees arguing.

While lowering the Central Bank rate in January to 5.75 percent, CBK Governor Prof Njunguna Ndung\’u said: "There were no foreseen upside risks to inflation in the near term."

Since the launch of the new inflation regime, policy makers have been at pains convincing consumers that the data reflects the reality on the ground at a time when most Kenyans are feeling the pinch of a surge in retail prices.

Follow the author at https://twitter.com/MjKaranja
 

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