Inflation rate to remain within the government’s set range of 2.5% – 7.5%
Kenya’s consumer price index increased by 5.6% in January from 5.62 per cent in December, official data shows.
Food inflation presently stands at 7.36% with the cost of commodities in the category rising by 1.3% from last month according to the Kenya National Bureau of Statistics (KNBS).
In the month, the Food and Non-Alcoholic Drinks’ Index increased by 1.3% due to an increase in prices of cooking oil, white bread, and cabbages by 10.4%, 6.6%, and 3.4 %, respectively, among other food items.
There was a surge of 1.1% in the Transport Index, mainly driven by a 4.9% and 0.2% increase in pump prices of diesel and petrol, respectively.
Consequently, a 0.3% increase was witnessed in Housing, Water and Electricity, Gas and Other Fuels’ Index, mainly attributed to a 4.2% and 3.2% increase in the cost of kerosene and electricity, respectively.
The Central Bank of Kenya (CBK) maintains inflation will remain within a range rate of 5% for most of the year.
“We expect overall prices to remain anchored and within the target band of 2.5 to 7.5%,” CBK Governor Patrick Njoroge told a news conference on Thursday.
“We forecast stable inflation for 2021 with the average rate for the year remaining well within CBK’s target range (2.5% to 7.5%) but above the 5% midpoint – 5.5% – 6.0% driven by food, housing and electricity as well as the transport indices which account for 63% of the total Consumer Price Index (CPI),” Sterling Capital Research in its Kenya Macroeconomic Review and Outlook 2021.