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Kenya’s Consumer Price Index (CPI) rose in February to 6.37 from 5.78 recorded in January attributed to increasing cost of tomatoes, onions, sukumawiki (kales) by the statistics body.
The highest growth since 6.58 percent in April 2019.
“The increase in inflation was driven by an increase in prices of several food items outweighing decrease registered in respect of others,” a statement by KNBS.
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Food and non-alcoholic index increased by 2.61 percent between January and February while the year on year food inflation in February stood at 10.58 percent.
“Notably, the prices of tomatoes increased by 62.4 percent in February 2020 compared to the same period in 2019. However, prices of mangoes and loose maize grain dropped by 8.39 and 1.3 percent respectively,” Kenya National Bureau of Statistics said on Friday.
During the period under review, housing, water, electricity, gas, and other fuels’ index increased by 0.47 percent due to an increase in the cost of house rents.
The cost of electricity consumption and kerosene dropped. While on the other hand, the transport index increased by 0.32 percent in the same period an increase attributed to a rise in the prices of petrol, diesel, and airfares.
Kenya’s High Inflation Prospects Force Investors to Sustain Cautious Play on Yield Curve
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“Although we expect continued flare-up in food inflation in the near-term, and as a result, the headline inflation, we do not expect the monetary policy committee to readjust the base rate upwards. On the other hand, in the event a protracted food supply shock feeds into an elevated demand shock – more precisely, when the core inflation (currently at 2.5% y/y) gallops into double-digit territory – then, there could be a compelling case for a tighter monetary policy response (that is,
increase in the benchmark rate).
We are less convinced of the likelihood of such a scenario, more so in light of a fragile private sector sentiment (January PMI at 49.7 signaling contraction),” commentary from Genghis Capital on the February Inflation Index.
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