June inflation rises despite drop in food prices

Inflation has risen for the second month in a row settling at 4.28% in June, according to numbers from the Kenya National Bureau of Statistics (KNBS).

The climb has been attributed to the higher cost of purchasing fuel and charcoal even though there has been an ease in electricity bills and food prices.

Green maize for example is now selling at Ksh 32 per cobb, a 25% drop from the previous month with onions, ripe bananas, paw paw and Irish potatoes also enjoying a percentage drop. This however comes on the backdrop of the rise in kerosene, petrol and diesel which has subsequently raised the cost of housing, water, gas and transport.

With May’s inflation rate signalling the first upward surge of the year, June’s numbers followed a similar trend to rise from the 3.95% inflation rate that was recorded last month. These two months have bucked the downward momentum that had been witnessed during the first four months of the year.

The year began on a cost of living high, with the 4.83% rate recorded in January going against a four month grain. From September of last year, the rate had been steadily dropping before steeping high in January as food, fuel and electricity prices escalated. In February, it dropped to 4.46% before sliding further to 4.18% and 3.37% in March and April respectively.

Higher food prices saw the bump to 3.95% last month with KNBS attributing this to the 1.35% increase in the food and non-alcoholic drinks’ index.

Food is a main driver of inflation as it usually forms the largest share of the basket of goods used to calculate the cost of living. However, the slump in food prices for the month of June could not prevent the rise in the inflation rate.

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According to the Central Bank of Kenya (CBK), the preferred inflation range is between 2.5% and 7.5%, meaning June’s cost of living measure comfortably falls within the monetary authority’s favoured limits.