Economy

May inflation rate drops to 5pc despite increase in food, fuel costs

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A shopper at Tuskys Supermarkets store on Waiyaki Way in Nairobi. PHOTO | SALATON NJAU

Inflation dropped to 5.0 per cent last month despite increases in the price of food and petroleum as electricity bills remained unchanged.

The Kenya National Bureau of Statistics (KNBS) data show that inflation eased from 5.27 per cent in April and 6.45 per cent a month earlier.

This is the fifth month in a row that the cost of living measure has dropped since December when it stood at 8.01 per cent.

The fall was despite a rise by Sh5 in the cost of a two-kilogramme packet of maize flour (Sh108), which is Kenya’s staple meal while a kilo of beans was up by Sh3 to Sh123. A kilo of tomatoes was up Sh6 to Sh155 as a kilo of Irish potatoes rose by Sh2 to Sh78.

Food takes up the largest share (36 per cent) of the basket of goods that is used to calculate inflation, meaning it is the main driver of the cost of living.

A litre of cooking oil was, however, down by Sh1 to Sh228 while a 13kg cylinder of cooking gas dropped by Sh16 to Sh2,252, offering homes a relief.

READ: Inflation down to lowest level since 2013 on falling food prices

The energy regulator mid-May raised the price of diesel by Sh4.14 a litre, petrol by Sh3.54 and kerosene by Sh3.02 to match the rebounding global crude prices, piling pressure on motorists.

“The transport index increased by 0.55 per cent in May compared to the previous month mainly due to higher costs of both petrol and diesel,” the KNBS said.

Electricity prices remained unchanged for four months in a row.

Homes that consumed 200 kilowatt hours in May paid Sh3,398 while those that used 50 units were set back Sh534.

The last time inflation was below 5.0 per cent was in June 2013 when it stood at 4.91 per cent. At 5.0 per cent, May’s inflation falls within the central Bank of Kenya’s preferred range of between 2.5 per cent and 7.5 per cent.