Kenya’s consumer price index (CPI) remained unchanged at 9.2 per cent on higher food costs in March, according to the National Bureau of Statistics (NBS) on Friday.
During the month under review, the price of a basket of goods and services consumed by households increased by 0.8 per cent from an index of 130.13 in February 2023 to 131.18 in March 2023.
The prices of commodities under food and non-alcoholic beverages increased by 13.4 per cent; housing, water, electricity, gas, and other fuels (7.5 per cent); and transport (12.6 per cent) between March 2022 and March 2023.
The month-to-month food and non-alcoholic beverages index increased by 1.6 per cent between February 2023 and March 2023.
Further, prices of commodities under furnishings, household equipment, and routine household maintenance increased by 7.5 per cent.
The prices for cabbages, carrots, and potatoes (Irish) increased by 8.9, 8.5, and 8.0 per cent, respectively, between February 2023 and March 2023.
A kilo of cabbage retailed at Sh65.17 from Sh59.86 in February, while a kilo of potatoes retailed at Sh99.01 from Sh91.63.
Prices of onions- leeks and bulbs, cooking oil (salad), and tomatoes decreased by 0.9, 0.7 and 0.3 per cent, respectively.
The price of a litre of cooking oil reduced to Sh321.24 from Sh323.38.
The Housing, Water, Electricity, Gas, and Other Fuels’ Index, increased by 0.6 per cent between February 2023 and March 2023.
This was mainly due to an increase in electricity prices which went up by 11.6 per cent for 50 Kilowatts and 9.0 per cent for 200 kilowatts between February 2023 and March 2023.
In addition, prices of gas/ LPG rose by 1.2 per cent during the same period.
The Transport Index increased by 0.3 per cent between February 2023 and March 2023. The increase was mainly due to a rise in petrol prices by 1.1 per cent in the same period.
What Next?
While risks to the inflation outlook remain on the upside for 2023, price growth is seen to decelerate in the coming months.
“Nonetheless, the long rains will moderate food inflation in the coming months,” said Dr Patrick Njoroge, the Central Bank of Kenya Governor.
The Monetary Policy Committee raised its key policy rate by 75 basis points to a five-year high of 9.50%, citing the necessity to reign in the raging inflationary pressures in light of the ongoing elevated global risks and their potential impact on the domestic economy.
NCBA Market Research anticipates headline inflation to remain above the upper band target of 7.50 per cent in the near term, mainly reflecting the projected increase in electricity prices, scaling down of the fuel subsidy, and sustained underperformance of agriculture.
The agriculture sector is projected to grow at 4.40 per cent in 2023, below its long-run trend.
“Going forward the monetary policy path will be informed by the need to anchor inflation expectations while balancing the risks of severely curtailing the economic momentum,” adds NCBA.
