World Economic outlook - kenya inflation rate january 2012 : Kenya's inflation slightly dropped in January to 18.31 per cent from 18.93 per cent recorded in December. The minimal drop is mainly attributed to a reduction in cost of transport and communication according to the Kenya National Bureau of Statistics. The transport index went down 1.47 per cent as a result of reduced fares after a 4.59 per cent and 1.70 per cent cut in prices of petrol and diesel respectively by the Energy Regulatory Commission.
However, the benefits of lowered fuel cost did not trickle down to other goods and services, which recorded price increase. Food and non-alcoholic drinks index rose by 0.58 per cent . “This slight increase was a result of both rises and falls in a number of food products,” said Anthony Kilele, KNBS Director general noting the prices of perishable foods like tomatoes, onions, cabbages shot up while those of other packaged foods like flour and sugar dropped slightly.
The housing, water ,electricity, gas and other fuels basket also went up 0.49 per cent during the month. But individually the cost of electricity reduced due to lower fuel and forex adjustment rates. “For instance, the cost of 50 units of electricity went down from Sh736 in December to Sh582 in January,” said KNBS.
The back to school season also saw the education index shoot up rise 3.14 per cent due to higher schools fees charged and increased cost of text books . Healthcare also went up by 3.13 per cent due The January figures come ahead of today Central Bank's Monetary Policy Committee rate setting. It is expected to leave the key interest rate unchanged at 18 per cent to maintain support for the currency and ensure inflation stays on a downward path.
The tight stance was taken in December and has so far contributed to a decline in inflation from 19.72 per cent peak in November to 18.93 per cent in December and now 18.31 per cent. The shilling has been trading at stronger levels of around 83-86 against the Dollar in the past week against a the 107 low it hit in mid-October.
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