November Inflation Eases to 5.8%, Helped by Lower Food Cost

Kenya’s annual inflation eased to 5.8 per cent in November from the previous month’s 6.4 per cent, helped by lower increases in the cost of food and non-alcoholic beverages, government data showed on Tuesday.

This is the lowest rate of the Consumer Price Index, seven months since April when inflation stood at 5.76 per cent.

“This was mainly due to an increase in prices of commodities under food and non-alcoholic beverages (9.92%); transport (8.14%); and housing, water, electricity, gas and other fuels (6.24%) between November 2020 and November 2021,” the Kenya National Bureau of Statistics said.

The overall Consumer Price Index (CPI) increased by 0.45 per cent from 116.674 in October 2021 to 117.203 in November 2021.

Analysts are of the view that persistent supply shocks, risks from poor weather, rising energy prices and a mild pick up in domestic demand are key risks to inflation. 

“We believe the current drought affecting half of the country if prolonged, could trigger food supply shocks and prices may face upward pressure in the coming months,” Genghis Capital Analysts.

However, inflation is expected to remain with the Central Bank of Kenya’s target range of 2.5% to 7.5% and is expected to stay within aim in the near term as demand pressures remain muted.