Inflation in Kenya drops to 7.06%

Kenya’s inflation fell to 7.06% year-on-year in September, from 8.04% a month earlier. The rise in annual inflation is mainly attributed to higher prices of food, mainly because of reduced supply in mid-month of September.

Consumer prices increased 8.04% year-on-year which is above July market expectation of 7.6%, and way above the 7.47% realised.

In August 2016, prices continued to rise 13.57% for food and non-alcoholic beverages as compared to the 12.19% in July. For housing and utilities, inflation rose to 3.49% in August as against 3.03 in July. Additional upward pressure came from transport, 2.77% as against 2.67%. Same goes for clothing and footwear 4.07% vs 3.80%, furniture and household equipment were not lest out with a 3.40% vs 3.23%.

This inflation occurred monthly, as consumer prices went up 0.61% following a 0.96 drop in the previous month. Cost recovered for food and non-alcoholic beverages were 1.04% vs -2.05% in the previous month, some of these food and beverages are tomatoes, spinach, carrots, wheat flour, rice grade one and potatoes.

In addition, prices recovered for housing and utilities are 0.54% as against -0.08%, this is due to a marginal increase in prices of electricity and kerosene. Also, cost of transport rose marginally 0.03 percent, after dropping 0.29% in July, affected by higher prices of diesel, despite the fall in petrol cost.

Kenya has been struggling with hunger after being hit hard by 2 years of drought. Below average performance of the 2016 short and long rains has led to a severe drought in the Arid and Semi-Arid Lands (ASAL) of Kenya. Therefore, the food insecure population in Kenya has more than doubled over a six-month period.

It is estimated that 2.7 million people in Kenya are now in need of relief assistance, from 1.3 million in August 2016. This includes 300,000 people in non-Arid and Semi-Arid (non-ASAL) counties affected by crop failures and decline of yields. This has led to the inflation in the country