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Kenya Inflation Tipped to Rise Due to Rising Food, Electricity and oil Prices

BY David Indeje · January 29, 2018 08:01 am

Economists are forecasting that Kenya’s consumer price index (CPI) will rise to a range of between 4.9 percent – 5.2 percent from 4.5 percent in December.
According to Genghis Capital and Cytonn Investment Analysts, food inflation will edge up mainly as the maize subsidy program has come to an end.
“Bread and cereals account for 10.52 per cent of the overall CPI basket while fuel and power constitute circa 30 per cent of agricultural material inputs,” noted Genghis Capital.
Cytonn observes that the global oil prices are expected to rise due to a supply cap enforced by the Oil Producing and Export Countries (OPEC), which will lead to increased cost of transport and electricity production implying the higher cost of living for Kenyan households.
“We expect inflation to average 7.5 percent over the course of the year down from 8.0 percent in 2017, which is within the government target range of 2.5 percent – 7.5 percent,” stated Cytonn.
Further, the Central Bank’s Monetary Policy Committee says “Although the rise in international oil prices is expected to exert moderate upward pressure, overall inflation is expected to remain well anchored and within the Government target range in the near term.”
On the other hand, the Energy and Regulatory Commission increased fuel prices three months in a row. The current fuel prices that will end  15th February 2018: the price of Super Petrol has gone up by 2.13 shillings, Diesel by 2.39 shillings while Kerosene by 3.36 shillings. A liter of petrol is retailing at 106.3 shillings in Nairobi with Diesel going for 98.82 shillings.
This month’s figures will be released by the Kenya National Bureau of Statistics (KNBS).

David Indeje is a writer and editor, with interests on how technology is changing journalism, government, Health, and Gender Development stories are his passion. Follow on Twitter @David_Indeje David can be reached on: (020) 528 0222 / Email: info@sokodirectory.com

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