NAIROBI, Kenya: June 29 (Xinhua) — Kenya’s overall inflation declined to 10.05 percent in June from 12.22 percent in May because of falls in some food products, the national statistics bureau said on Friday.
Kenya’s National Bureau of Statistics (KNBS) said the Consumer Price Index (CPI), computed using the geometric mean approach, decreased to 133.06 in June from 134.09 in May.
“Food and non-Alcoholic drinks’ index fell by 1.91 percent between May and June. The decrease was mainly due to falls in prices of food products such as milk, potatoes, tomatoes, cabbages, onions, oranges and kales compared to May,” the bureau said in a statement issued in Nairobi.
The Central Bank of Kenya (CBK) said the inflation is still above the short-term target of 9 percent. The Economic Survey released by the Kenya National Bureau of Statistics in May showed that the economy remained resilient and registered an annual growth of 4.4 percent in 2011.
However, the CBK monetary committee noted there were still potential threats and risks to both consumer prices and exchange rate stability that could increase inflationary pressure. Market analysts said a weak local currency has the effect of inflating dollar, pound and euro-denominated salaries of expats such as employees of United Nations, diplomatic missions and multinationals by the same margin.
The East African nation’s economy is projected to grow 3.5 to 4. 5 percent in 2012 according to the country’s economic survey for 2012, weighed down by high interest rates, excessive rainfall and high spending because of the general elections. Last year, Kenya’s economy grew by 4.4 percent compared to 5.8 percent recorded in the year 2010.
All sectors of the economy except hotels and restaurants registered slowed growth compared to the previous year. According to the bureau, the housing, water, electricity, gas and other fuels’ index decreased by 0.20 percent, between May and June mainly on account of reduced costs of electricity, kerosene and cooking gas.
The Transport index also declined by 0.35 percent over the same review period due to lower cost of petrol, diesel and public transport fares. Kenya’s economy has been experiencing turbulence caused by internal and external factors, including high food and fuel prices, the recent drought in the Horn of Africa which has been followed by heavy rains and flooding, and the euro crisis.
But the analysts noted if Kenyans manage these challenges well, they may set the foundation for a more prosperous future. (Xinhua)