Inflation eases to 6.26pc on lower food prices

The cost of living eased slightly to 6.26 per cent last month on lower food prices that helped to cushion consumers against effects of rising fuel prices.

The Kenya National Bureau of Statistics (KNBS) data shows inflation dropped from 6.39 per cent in July, marking a break from increases in the rate for the previous two months.

“Between July and August, food and non-alcoholic drinks’ index decreased by 0.19 per cent,” KNBS said in a statement. Food takes up the largest share (36 per cent) of the basket of goods that is used to calculate inflation, making it the main driver of the cost of living.

Onions were on average down by Sh9 to Sh135 a kilogramme in August, Irish potatoes dropped by Sh3 to Sh73 a kilo while a two-kilo pack of wheat flour was down Sh1 to Sh120.

Consumers, however, had to contend with higher fuel prices after the energy regulator mid-August raised the prices of diesel, petrol and kerosene — the latter mainly used by poor homes for cooking and lighting.


Petrol went up by Sh2.2 a litre, diesel Sh1.27 and kerosene Sh1.03, piling pressure on budgets as expenses for transport, manufacturing and agricultural production rose.

But the fuel price increments were absorbed by the falling prices of food, which accounts for the largest share of poor households’ budgets.

The KNBS data shows that electricity prices remained unchanged in August. Homes consuming 200 kilowatt hours (kWh) monthly paid Sh3,361 while users of 50 units paid Sh525.

Consumers also got relief from falling cooking gas prices. The KNBS data shows that refilling a 13-kg gas cylinder cost an average of Sh2,078 in August down from Sh2,097 a month earlier and Sh2,374 in August 2015.

At 6.26 per cent, August inflation falls within the Central Bank of Kenya (CBK) preferred range of between 2.5 per and 7.5 per cent.

The easing inflation comes at a time when banks have chopped their interest rates on loans, capping them at 14.5 per cent following a change in the law.