INFLATION

Cost of living hits 18-month high in August as food prices increase

The price of a kilo of potatoes, sukuma wiki, beef and carrots also rose by between nine and 16 per cent.

In Summary
  • The monthly inflation rose to 6.57 percent
  • The prices for all 13 items in the food basket rose for the first time in the past two years
A display of tomatoes at Kangemi Market
A display of tomatoes at Kangemi Market
Image: MERCY MUMO

A steep increase in food prices, cooking gas and kerosene in August saw families spend more as inflation rose to a year and a half high.

The monthly Consumer Price Index released Tuesday by the Kenya National Bureau of Statistics (KNBS) shows inflation rose to 6.57 per cent compared to 6.55 per cent in July. 

"This was mainly driven by a 10.65 per cent rise in food and non-alcoholic products,  transport 7.63 per cent, housing, water, electricity, gas and other fuel commodities of 5.07 per cent,'' KNBS said. 

According to the statistics body, the Consumer Price Index (CPI) that measures the overall year-on-year inflation increased by 0.23 per cent from a revised index of 115.44 in July to 115.71 in August.

The prices for all 13 items in the food basket rose for the first time in the past two years, a spiral effect of a high tax regime that kicked in July. 

The shift in the school fees payment after the Covid-19 continues to pain families who are now forced to pay on monthly basis as opposed to quarterly in the  pre-Covid-19 regime.

The Ministry of Education was forced to adjust the school calendar after students stayed home for almost a year following the global outbreak of Covid-19. 

The monthly cost of education rose by 2.2 per cent in August, contributing an average weight cost of five per cent in the overall CPI. 

It was the highest contributor to the overall increase in inflation after food, housing and transport transport.  

The Finance Act 2021 saw the return of VAT on Liquified Petroleum Gas (LPG) and a five per cent increase in a host of excise duties, mostly touching on communication. 

The cost of vegetables and fruits rose on erratic rainfall, with a kilo of cabbage, spinach and oranges selling at 3.74, 3.o4 and 2.44 per cent respectively. 

The cost of a kilo of potatoes, sukuma wiki, beef and carrots also rose by between nine and 16 per cent. 

The price of 50 kilowatts of electricity rose by Sh100 last month compared to a similar period last year while a 13-kilogram gas cylinder was refiled at  Sh2,394 compared to Sh2,o06 in August last year. 

A litre of kerosene rose by over Sh10 to retail at Sh98.78 from Sh84.60 in August last year. The majority of households in the country use kerosene for cooking and lighting. 

A litre of petrol and diesel on the other hand rose by Sh23 and Sh13 respectively to Sh127.98 and Sh108.53 during the period under review. 

The transport index decreased by 0.32 per cent as public service vehicles resumed full capacity load after the government eased Covid-19 transport measures. 

The cost of living is likely to rise further in the coming months as the weatherman predicts low rainfall. 

Last month's inflation was, however, within the government's range target of below 7.5 per cent.