Inflation rises to 58-month high as goods prices soar

The price increases of essential items like cooking oil, food, fuel and soap is squeezing household budgets and demand for goods and services. PHOTO | FILE

Kenya’s inflation hit a 58-month high in June on soaring prices of food items, breaching the government’s upper limit target for the first time since August 2017.

The inflation — a measure of annual changes in the cost of living— hit 7.9 percent in June from 7.1 percent in May, the Kenya National Bureau of Statistics reported on Thursday.

This is the first time year-on-year inflation crossed the upper limit of 7.5 percent since August 2017 when it climbed to 8.04 percent on a biting drought at the time.

“The rise in inflation was mainly due to increase in prices of commodities under food and non-alcoholic beverages (13.8 percent); furnishings, household equipment and routine household maintenance (9.2 percent); transport (7.1 percent) and housing, water, electricity, gas and other fuels (6.8 percent) between June 2021 and June 2022,” KNBS managing director Macdonald Obudho said in a statement.

“Relative to May 2022, prices of wheat flour-white, carrots and cooking oil (salad) increased 12.7, 4.7 and 4.7 percent in June 2022, respectively.”

The Central Bank of Kenya governor Patrick Njoroge had warned on May 31 of a “clear and present danger” of inflation punching above the upper limit of 7.5 percent in coming months.

“We will take all measures necessary to deal with inflation. But it is clear that on supply side-driven inflation [growth in cost of commodities], there’s virtually nothing that monetary policy can do. What monetary policy does is to deal with second-round effects,” CBK governor Patrick Njoroge.

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