Monthly inflation climbs on costly food, electricity
Central Bank of Kenya Governor Patrick Njoroge. Dr Njoroge noted that despite improvements in external conditions and global prices, the local economy is getting weaker, according to business leaders and market observations.
Monthly inflation rose by 0.8 per cent in March from February driven by an increase in the cost of food and utilities such as water, electricity, gas, and other fuels.
Fresh data from the Kenya National Bureau of Statistics (KNBS) shows the Consumer Price Index (CPI) rose to 131.18 in March from 130.13 in February after the prices of food and non-alcoholic beverages rose by 1.6 per cent during the period.
However, annual inflation remained steady at 9.2 per cent in March.
The annual inflation was driven by a 13.4 per cent rise in food and beverage prices in March compared to similar month last year while the cost of housing, water, electricity, gas, and other fuels increased by 7.5 per cent.
Further, the cost of transport has shot up by 12.6 per cent from March last year.
“These three divisions account for over 57 per cent of the weights of the 13 broad categories. Prices of commodities under furnishings, household equipment, and routine maintenance recorded an increase of 7.5 per cent over the period,” said KNBS.
Some of the food commodities whose prices have shot up fastest over the one year are maize flour whose price climbed by 25.6 per cent for a two-kilogramme packet while the cost of a one-kilo packet of loose maize grain has increased by 35 per cent.
Similarly, the prices of sugar went up by 18.4 per cent for a kilogramme packet, a kilo of beans increased by 32.9 per cent while the costs of kerosene and petrol rose by 35.3 per cent and 32.8 per cent respectively.
“The housing, water, electricity, gas, and other fuels’ index increased by 0.6 per cent between February 2023 and March 2023. This was mainly due to an increase in prices of electricity which went up by 11.6 per cent for 50 kilowatt-hours and nine per cent for 200kWh. In addition, prices of gas rose by 1.2 per cent during the same period,” said KNBS.
The increase in March inflation comes even as the Central Bank of Kenya (CBK) has downgraded the outlook of Kenya’s economic growth this year, warning of tougher times for Kenyans and businesses.
The CBK projects that Kenya’s gross domestic product (GDP) will grow by 5.8 per cent, which is a notable drop from the earlier estimate of economic growth of 6.1 per cent that was given by the Treasury.
It means this year is set to be just as tough as last since most businesses and households, even if the projected growth is slightly higher than the 5.6 per cent growth that the CBK estimates Kenya’s GDP grew by in 2022.
CBK Governor Patrick Njoroge, in a post-Monetary Policy Committee meeting Press briefing on Thursday, noted that despite improvements in external conditions and global prices, the local economy is getting weaker, according to business leaders and market observations.
