Consumers heave sigh of relief as inflation drops to its lowest in four years

Charles Awiti prepares food for his customers at his small food kiosk in Nairobi's Pipeline estate. Maize prices have fallen. [File Photo: David Njaaga|Standard]

It has taken Kenya four years and 10 months for the inflation to drop to a figure below five percent after months of easing up.

The country’s year-on-year inflation rate has dropped to 4.73 per cent in the month of November, one of its kind since February 2013 when it recorded 4.45 per cent.

According to Kenya National Bureau of Statistics (KNBS), the drop from an inflation of 5.72 per cent in October is heavily owed to a drop in the prices of food and non-alcoholic drinks owed to favorable weather conditions.

Carrots are the biggest gainers in the released Consumer Price Indices as a kilogram is retailing at Sh53.77 down from Sh60.09 in October, representing a 10.52 per cent drop.

Electricity records a 7.70 per cent drop while Kerosene and Cabbages drop 7.51 per cent and 7.2 per cent to cap top drops during the period under review.

However, the price of rent, water, electricity, gas and Other fuels shot up by 1.74 per cent due an increase in fuel cost adjustment charges which overwhelmed the decrease in foreign exchange adjustment charges.

The development is surpasses the Central Bank of Kenya’s target at 5 per cent with a plus or minus 2.5 percent range in the medium term.

This is in the backdrop of the bank’s decision to retain the benchmark lending rate at 10 per cent for the 14^th month, a move that is expected to even lower the inflation rates.

“We concluded that inflationary pressures in the economy were muted and inflation was expected to continue to decline in the short term,” CBK Governor Patrick Njoroge said when they announced the cap.