Capital FM (Nairobi)

31 January 2013

Kenya: Food, Transport Costs Push Up Inflation

Nairobi — Kenya's overall rate of inflation in January has gone up to 3.67 percent compared to last month's 3.20 percent, the first rise in the last 12 months.

The Kenya National Bureau of Statistics (KNBS) attributed the slight increase to rise in food and non alcoholic drinks index by 1.24 percent, transport by 0.61 percent and housing, water and electricity up by 1.06 percent.

Despite the drop in fuel prices, the growth in the transport index was mainly due to higher cost of taxi, bus and matatu fares.

The price of 1 kilogram (kg) of sugar went up by 0.1 percent to Sh122.17 from Sh122.07 in December 2012 while a packet of two 2Kg of wheat flour went up by 0.9 percent from Sh138.34 in December to Sh139.60.

The average price of a packet of 500ml of milk rose the highest by 6.7 percent from Sh35.89 to Sh38.31 while the price of a kilogram of meat went up by 0.4 percent to Sh193.53 to Sh194.28.

While the prices of kerosene, petrol and diesel dropped by 2.9 percent, 0.7 percent and 0.6 percent respectively, the average price of 13kg cooking gas went up by 1 percent to retail at Sh2, 630 from Sh2, 604 in December.

The average price of two kilograms of sifted maize flour also decreased by 0.2percent from Sh112.36 to Sh112.14.

Meanwhile every year in January, KNBS observes seasonal prices variations in areas like education and house rents. This month, these variations had an effect of pushing some of the indices upwards such as the education index which increased by 4.3percent on account on increase in tuition and boarding fees.

The inflation rate in December last year reduced to 3.20 percent from 3.25 percent in November.

Kenya's inflation hit a single digit of 7.74 percent in July this year from 10.05 percent in June last year.

The steady drop in inflation has led to Central Bank's lending rate to go down gradually to 9.5 percent in January this year.

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