NAIROBI, Kenya, May 2 – Kenya’s April inflation stood at 11.48 per cent, marking a jump from 10.28 per cent and 9.04 per cent in March and February respectively.
The Kenya National Bureau of statistics has said the rise in inflation is the highest to be recorded since May 2012.
Due to the prevailing drought, the Food and Non-Alcoholic Drinks Index increased by 3.55 per cent month over month and 20.98 per cent year over year.
In the food basket, apart from beans and maize flour-sifted, all other food items posted price increases of above 5 per cent month over month.
Despite a fall in the cost of kerosene, housing, water, electricity, the Gas and Other Fuels Index, increased by 0.63 percent month over month partly due to increases in the cost of house rents, other cooking fuels and water services.
KNBS has attributed the rise in the cost of electricity to higher foreign exchange adjustment charges per KWh of electricity consumed in April.
While ongoing rains are expected to ease food inflation, Standard Investment Bank says forecasts of below average rainfall will point to extended period of double digit inflation.
“We see the current inflation trend along with low credit availability having negative impact on private household consumption over most of 2017 resulting in weaker corporate top line growth and earnings,” the bank said in a statement.
In addition, although core inflation has remained within target, the bank additionally expects current levels of inflation, to steer monetary policy intervention especially as more rates along the yield curve turn negative.
This is even as prolonged double digit inflation is bound to impair banking sector margins as interest earning deposits seek to protect their real returns.