Better food supply, firm shilling to ease inflation
A well tended maize farm. Inflation pressure is likely to ease after rising for 12 consecutive months, analysts said citing improved rainfall and food supplies and the strengthening shilling. File Photo
Inflation pressure is likely to ease after rising for 12 consecutive months, analysts said citing improved rainfall and food supplies and the strengthening shilling.
The Kenya National Bureau of Statistics (KNBS) said on Friday that inflation levels for October stood at 18.91 per cent compared to the previous month’s 17.32 per cent, mainly propelled by jumps in food, fuel and electricity costs.
The food and non-alcoholic drinks index went up by 1.68 per cent between September and October after prices of sugar, beef, wheat flour, milk, rice, and cooking fat increased, the bureau said.
Housing, water, electricity, and fuel costs also rose in October, raising transport costs.
“The transport index increased by 1.52 per cent between September and October due to continued increases in the cost of petrol, diesel, taxi charges, and bus fare as a consequence of high fuel prices and weakening shilling,” KNBS said.
Approaching peak
Analysts, however, said the inflation level might be approaching its peak and could ease in coming months on improved supply of food, higher water levels in power generation dams, and a strengthening shilling against the dollar.
“Given a few weeks of relative forex stability, and perhaps even appreciation of the Kenya shilling, there is some likelihood that the pressure will dissipate with more moderate month-on-month gains in inflation thereafter,” said Razia Khan, an analyst with Standard Chartered Bank.
The recent weakening of the shilling to a record low of 107 units against the dollar sent the economy into a panic amid massive climbs in the cost of key items such as petroleum products, food, and electricity.
Electricity distributor Kenya Power, for instance, mid this month raised foreign exchange adjustments on consumer bills for November to Sh2.74 per kilowatt hour from this month’s rate of Sh1.48, citing the weakening shilling.
