No respite as cost of living hits 7-year high in October – The Star Kenya
Kenya’s cost of living rose to the highest level in seven years months in October to hit 9.6 per cent up from 9.2 per cent in September.
The Kenya National Bureau of Statistics (KNBS) has attributed the high cost of living to a sharp increase in the cost of food and non-alcoholic beverages.
The last time the country witnessed this kind of inflation was in September 2017. The country’s inflation has been on the rise since February when it posted 5.08 per cent.
It marks the fifth month in a row that the year-on-year cost of living measure crossed the upper limit target of 7.5 per cent.
The statistics body said the inflation was largely driven by the average cost of food and non-alcoholic drinks, which climbed 15.8 per cent.
Transport accounted for 11.6 per cent of the inflation while the housing; water, electricity, gas and other fuels index increased by 7.1 per cent in the last 12 months.
”Furnishings, household equipment and routine household maintenance index increased by 10.9 per cent in the last 12 months.
The Consumer Price Index (CPI), a measure of the weighted aggregate change in retail prices paid by consumers for a given basket of goods and services increased by o.4 per cent to Sh125.58 from Sh125.05 in July.
The month-to-month food and non-alcoholic beverages index increased by 1.4 per cent.
Prices of common household goods including Irish potatoes, sugar and beans increased by 12.5, 12 and 7.5 per cent.
Prices of a kilo of maize flour, cooking oil and carrots dropped by 3.6, 3.5 and 2.4 per cent respectively.
Beer, wine and rent went up by 1.2, 0.8 and 0.7 per cent respectively. Even so, vegetable prices eased during the month, with carrot and onion prices dropping 6.4 and 2.4 per cent in that order.
Experts have predicted even higher inflation as the year ends considering the tumbling of the shilling that closed the day at 121.32 against the dollar.
The high inflation is, however, a global phenomenon, with leading economies like the US, the UK and several countries in Western Europe reporting a 40-year high.
On Friday, the US Federal Bank is expected to raise the base-lending rate by between 0.75 and 1.5 per cent to slow inflation.
Apex banks globally use the interest rates as either a gas pedal or a brake on the economy when needed.
They set the short-term borrowing rate for commercial banks, and the banks pass it along to consumers and businesses.
With inflation running high, they can raise interest rates and use that to pump the brakes on the economy in an effort to get inflation under control.
Advertise with us: Call 0711 046 000 · [email protected]