June inflation edges up to 7.03 per cent

Inflation in June edged up to 7.03 per cent from 6.87 per cent recorded in May, the statistics bureau has reported.

The modest climb in the year-on-year inflation rate is attributed to rise in fuel prices and effects of a weaker shilling.

Data released by the Kenya National Bureau of Statistics (KNBS) shows that housing, water, electricity, gas and other fuels’ index increased by 0.37 per cent driven by cost increases in house rents and cooking fuels in June.

In recent weeks the Central Bank has sold dollars whenever the shilling has fallen to the Sh99-per dollar level, causing traders to speculate about another possible intervention.

According to KNBS, during the review month, the transport index increased by 0.86 per cent mainly due to notable rises in the cost of petrol and diesel.

“There were notable decreases in the fuel cost adjustment charges per kWh of electricity (due to increased hydropower generation). However, these were balanced out by increases in foreign exchange charges hence, the cost of electricity remained as in the previous month.”

However, food inflation eased in the month of June by 0.1 per cent, which KNBS attributed to decreases in food prices. The alcohol and tobacco index, however edged up 0.49 per cent, while the health and communication index climbed by 0.47 and 0.75 per cent respectively.

The national statistics bureau says the numbers have been generated using data collected in the second and third weeks of the month under review.