Kenya’s Annual Inflation Declines to 5.0% in August

Inflation Dropped 4.36 pct in July On Cheap Food and Housing Cost

Kenya’s annual consumer price inflation fell off to 5.0% year-on-year in August from 6.27% July attributed to declining food prices.

According to the Kenya National Bureau of Statistics on Friday, on a monthly basis, inflation was -0.90% from -0.36% in July, with the Food and Non-Alcoholic Drinks Index falling 1.89% compared with July.

“The prices of significant food items including sukuma wiki (kales), potatoes, cabbages, carrots, tomatoes and maize grain loose decreased by 8.01, 7.81, 6.78, 6.01,
4.89 and 2.80 percent, respectively. Decrease in prices of these commodities outweighed observed increase in the cost of other foodstuffs, thereby causing a decrease in the food index.”

Early in the week, Commercial Bank of Africa Analysts further said the drop would be felt because of the reduction in pump prices in August. Oil prices have shown considerable vulnerability, declining by 7.71% in July.

As a result, “The Transport Index decreased by 0.03 percent mainly due to the reduction in pump prices of diesel and petrol by 3.14 and 2.45 per cent respectively,” said KNBS. 

“Reduced food and fuel price pressures coupled with muted demand pressures, thanks to the persistent slack in credit markets and employment should temper the acceleration in inflation…We expect inflation to drop below 6.00% in August, and potentially hold around 5.50% for the rest of the quarter,” they said in their weekly Fixed Income Report.

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