Inflation eases to 5.53 percent as food prices fall

A marked reduction in the prices of foodstuff contributed to a slower growth in the price of goods and services in October, new data shows.

The latest figures from the Kenya National Bureau of Statistics (KNBS) released yesterday showed that consumer prices in the economy increased by 5.5 per cent in October compared with 5.7 per cent in the previous month. This was largely on the back of a reduction in the price of maize following a bumper harvest of the grain.

Year-on-year prices of maize grain and sifted maize flour declined by 39.2 per cent and 17.47 per cent respectively as inflation remained within the Central Bank of Kenya target of 2.5 and 7.5 per cent.

A kilogram of loose maize grain was sold at Sh34.53 in the month under review compared with Sh56.80 in October last year.

Kiunjuri’s decree

During this period, the Cabinet Secretary for Agriculture Mwangi Kiunjuri directed that a 2kg packet of maize flour be sold at Sh75, a decree that stores in major urban centres reluctantly complied with.

The flour retailed at Sh83.83 in October compared with Sh101.58 in the same month last year.

“Between September and October 2018, the Food and Non-Alcoholic Drinks’ Index declined by 1.76 per cent. The decrease was mainly due to lower prices of maize and maize products compared to previous months,” said KNBS in its latest report on Consumer Price Index and Inflation for the months of October 2018.

Other food commodities whose prices reduced include tomatoes, with a kilo of the vegetable retailing at Sh67 in October compared with Sh105 in October 2017, a 36.19 per cent decline. However, the slower pace in increase of inflation is far from the ideal 3.73 per cent that the economy managed in April.