Kenya’s annual inflation stood at 6.06 percent last month after the inclusion of contemporary items such as mobile phone airtime, pay TV subscription and garbage collection charges to the basket used to measure the cost of living.
The Kenya National Bureau of Statistics (KNBS), in the changes to the inflation basket, removed archaic goods and costs such as radio cassettes, kerosene stove and video cassette hire, meaning that a like-for-like comparison with February’s inflation number would be misleading.
Inflation in February stood at 6.37 percent, based on the old basket of goods.
Last month, the key drivers of inflation were energy costs and selected food items, KNBS said.
“Food and non-alcoholic drinks index increased by 0.55 percent between February 2020 and March 2020 while the year-on-year food inflation in March 2020 stood at 11.85 percent. The increase was mainly driven by increase in price of some food items such as mangoes, Irish potatoes, onions and cooking oils,” said KNBS.
Compared to last year, the price of a kilogramme of maize flour and tomatoes rose by 26.2 and 24.5 percent respectively, while the cost of a kilogramme of onions rose by 18.2 percent.
The increase in energy costs was mainly driven by a rise in the price of charcoal by 12.3 percent compared to March 2019, while the price of a litre of petrol rose by 8.54 percent.
The prices of petrol, diesel and kerosene are, however, expected to come down in the next review following a crash in the global price of crude oil, which has halved to $23 a barrel since February.
The March inflation calculation changes by KNBS were meant to present a more accurate picture of the cost of living in the country. The changes include an increase in the number of data collection zones from 25 to 50 and the number of items in the basket from 234 to 330.
Mobile airtime is the single biggest expenditure item in the new basket, followed by city bus matatu fare and rent cost for a single room. Hotel and restaurant food is the fourth most important item, climbing from ninth position in the previous basket, with beef, beer, bread and fresh milk also featuring prominently in the top 10.
In terms of the weighting groups in the consumer price index (CPI), food and non-alcoholic beverages take the top spot at 32.91 percent, followed by housing, water electricity, gas and other fuels at 14.61 percent and transport at 9.65 percent.