Kenyan Inflation Shoots To A New Record High Of 8.3 Percent.
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- cost of living kenya, inflation kenya, kenyan economy
- Nyambura Tabitha
The Kenyan inflation has hit another record high after it supersedes last month’s record of 7.9 percent to now 8.3 percent. The current inflation rate is at a 61-month high despite central bank fiscal policy and state subsidies on key commodities and tax reduction policy applied last month.
Inflation was mainly driven by the increase in food prices and non-alcoholic beverages which is up by 15 percent.
The figures in detail
The Kenya Bureau of Statistics [KNBS] has released detailed data on the current state of Kenya’s consumer price index. According to the released data, the annual rate of inflation as measured by the consumer price index [CPI] was 8.3 percent, in July 2022.
The monthly food and non- Alcoholic beverages index rose by 1.1 percent between June 2022 and July 2022. The retailing price of white rice increased to 13.4 percent, the cost of potato has also increased by 15.4 percent while the price of a kilogram of maize has increased by 31.5 percent which in turn has led to high maize flour prices.
Carrot prices had the biggest price rise of 41.1 percent now retailing at sh 105.31 per kilogram in July.
The cost of laundry soap was also high jumping to sh 165.70 per 800 gram that’s a 34 percent increase from the previous retail price. The cost of fuel also rose by 30.5, 29.8and 25.0 percent for kerosene, diesel, and petrol consecutively.
Did the previous fiscal policy fail?
The high rate of inflation rose despite the government’s efforts of introducing some fiscal policy last month to curd the upward trajectory.
Last month, the central bank of Kenya responded to the rising inflation, through the monetary policy committee by raising the benchmark central bank rate [CBR] reducing the interest rates from 7.5 percent to 7.0 percent.
To be fair the central bank chair expressed caution, he told the media lowering the bank interest rates couldn’t have the desired effect since the inflation was supply-driven inflation.
Maize Subsidy Deal
Also, the government last week sealed a subsidy deal with maize millers to reduce the price of maize flour by almost 50 percent to sh100 per 2-kilogram packet which previously retailed at sh205.
The maize floor price cap hasn’t been reflected yet, it is expected to come down maybe this month of August.
The central bank of Kenya this month preferred to let its benchmark lending rate unchanged advising lenders to keep the cost of loans steady. They defended this position arguing the only solution is moderating international prices of oil and food items will flatten the curve. CBK governor Patrick Njoroge said he expects the rate of inflation to keep rising even this month.