Inflation Defies Odds and Takes a 7-year Low Dip to 4.18 Percent

The inflation rate in Kenya registers 4.18 percent in March, which represents the lowest consumer price in 7 years since 2011 when it recorded 4.05 percent.

The level is a decline from 4.46 percent in February. This improvement is owed to the increases in some foodstuff prices that outweighed decreases in others.

Between February and March 2018, Food and Non-Alcoholic Drinks’ Index increased by 1.54 percent. Also, a decrease was recorded in the year to the year food inflation rate. It dipped from 3.83 percent in February 2018 to 2.19 percent in March 2018.

Due to the increase in prices cooking fuel, an increase of 3.78 percent was recorded in March 2018 compared to February 2018. This is regarding Housing, Water, Electricity, Gas and Other Fuels’ Index.

Charcoal, due to the ban on logging, recorded a 27.1 percent increase in price during the review period. The rise in the cost of electricity was attributed to rising in fuel cost adjustment charges per kWh of consumption.

During the period under review, the Transport Index decreased by 0.06 percent because of a decrease in pump prices of petrol.

At this level of inflation, it means that the country is remaining within the desired range of 2.5 percent and 7.5 percent recommended by the Central Bank of Kenya (CBK).

During the last meeting to review the rate, the CBK’s monetary policy noted that the overall inflation was expected to be within the Government target range in the near term as contained food prices were expected and the weather conditions were improving.

Foodstuffs that registered a decline in prices include Irish potatoes, cabbages, and sugar.

“Non-food-non-fuel (NFNF) inflation remained below 5 percent, a clear indication that demand-driven inflationary pressures are muted,” said CBK.

Between February and March, food and non-alcoholic drinks’ index increased by 1.54 percent.