Slight relief for consumers as inflation drops to 7.06 per cent

The price of a kilogram of cabbage dropped from Sh66.92 in September 2016 to Sh46.58. [Photo: Kevin Tunoi, Standard]

 

Drop in the price of cabbage and potatoes helped push down the cost of living in September.

Year-on-year inflation fell from 8.04 per cent in August to 7.06 per cent with the prices of the two food commodities reducing by almost a third, according to the latest figures by the Kenya National Bureau of Statistics (KNBS).

Consumers who not long ago endured sky-rocketing prices of basic foodstuffs due to drought which pushed inflation to a five-year high of 11.7 per cent in May 2017 have heaved a sigh of relief.

Apart from the Irish potatoes whose prices declined from Sh77.46 in September 2016 to Sh53.13 per kilogramme in September 2017 and cabbages (Sh66.92 to Sh46.58 respectively), the prices of most other commodities increased.

However, the cost of food, which takes up a third of most poor household’s expenditure, and accounts for 36 per cent of food basket weighted by KNBS, declined.

Depressed supply

“Between August and September 2017, Food and Non-Alcoholic Drinks’ Index decreased by 1.28 per cent.

“This was due to a fall in the cost of some food items which was mainly attributed to a relief from a situation of depressed supply of goods and services as experienced in August 2017,” said the report by the national statistician.

As a result, the year-on-year food inflation dropped to 11.50 per cent in September 2017.

This was despite the price of a kilogramme of tomatoes going up by 48.44 per cent from Sh69.69 in September 2016 to Sh103.45 in September 2017.

Prices of maize flour and maize grains also went up by 23 per cent and 32 per cent, respectively, a worrying development given that Kenyans are said to be enjoying cheap unga through the Government’s subsidy programme.

The overall drop in inflation was in line with Central Bank of Kenya expectations.

The CBK Governor Dr Patrick Njoroge had blamed the August inflation on supply constraints in the build-up to the polls. During and after the polls, the CBK boss said that suppliers took advantage of the shortage to increase prices.