Inflation has hit a new record, a 65-month high in Kenya, fuelled by increased food, fuel, and housing costs.
Data by the Kenya National Bureau of Statistics (KNBS) shows the country’s overall inflation rate in October stood at 9.6 per cent, compared to 9.2 per cent in September.
“The rise in inflation was largely due to an increase in prices of commodities under food and non-alcoholic beverages (15.8 per cent); transport (11.6 per cent) and housing, water, electricity, gas and other fuels (7.1 per cent) between October 2021 and October 2022,” KNBS said.
The last time Kenya witnessed this kind of inflation was in June 2017, when it hit 9.21 per cent.
The KNBS data shows that a kilogram of sugar jumped 36.3 per cent year-on-year to KSh154.95 in October, two-kilo maize flour climbed 33.5 per cent to average KSh177.66, and Irish potatoes went up 32.6 per cent to KSh90 per kilogram.
The cost of diesel surged fastest at 47 per cent to KSh 163.92 per litre on average, while kerosene retailed at KSh147.87, a 41.6 per cent climb.
The Housing, Water, Electricity, Gas and Other Fuels Index increased by 0.5 cent between September 2022 and October 2022 due to prices of 50 kilowatts and 200 kilowatts electricity units, which increased by 2.4 per cent and 1.8 per cent, respectively.
“Our in-house projections indicate that headline inflation should maintain its incline in light of emerging pressure on food and fuel costs,” NCBA Weekly Fixed Income-October 31st October 2022 notes. “This should sustain inflation above the 7.50% statutory target in the near term.”
“Even so, concerns regarding second-round effects, more entrenched inflation expectations, and weakness in the broader economy should necessitate a more cautious policy rate hike cycle. Having raised rates to 8.25% this year, an increase of 125 basis points, we see room for an additional 25 basis points by year-end.”
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