Kenya inflation falls to lowest level in two years

Kenya’s inflation fell to a 24-month low in April, hitting five percent, the latest data from the Kenya National Bureau of Statistics shows, as prices of major food commodities continued to fall.

This is the third consecutive month the index has fallen, from 6.9 percent in January to 6.3 percent in February and 5.7 percent in March, and now down to five percent last month.

The continued decline comes despite some price increases in some indices.

The main contributors to April’s year-on-year price increases included transportation, food and non-alcoholic beverages, housing, water, electricity, gas and other fuels.

However, the transport index fell by 0.3 percent between March 2024 and April 2024, according to the statistics agency. attributed to a drop in gasoline and diesel prices of 2.7 percent and 5.2 percent, respectively.

This was mainly due to a drop in gasoline and diesel prices of 2.7 percent and 5.2 percent, respectively, month on month.

In Nairobi, pump prices have dropped from Sh207.36, Sh196.47 and Sh194.23 per super petrol, diesel and kerosene, in January, at the current Sh193.84, Sh180.38 and Sh170.06, respectively.

The KNBS further states that the food and non-alcoholic beverages index, which accounts for 32.9 percent of the inflation measure, fell 0.1 percent during the period.

“The price of sugar, bulk corn grain, enriched corn flour and bulk corn flour fell by 8.3, 3.6, 3.0 and 2.8 percent, respectively, between March 2024 and April 2024,” the KNBS said in its latest monthly inflation data.

However, the ongoing floods partly affected the cost of some food products, the prices of which increased by 5.8, 4.3 and 4.0 percent respectively, such as onions, leeks and bulbs, tomatoes and the oranges.

The KNBS data adds that the index for housing, water, electricity, gas and other fuels fell by 1.3 percent, mainly due to a drop in the price of kerosene of 9.7 percent.

Likewise, the prices of 200 kWh and 50 kWh of electricity fell by 6.4 percent and 7.7 percent, respectively.

In April, households using 50 kilowatt-hours paid Sh1,292 compared to Sh1,400 in March.

However, the price of gas/LPG increased by 0.3 percent during the period.

On a monthly basis, April inflation was -0.2 percent compared to 0.2 percent in March.

The Kenyan government prefers inflation between 2.5 percent and 7.5 percent.

The drop comes after the Central Bank of Kenya (CBK) earlier this month kept its benchmark interest rate at 13.0 percent, to allow inflation to continue to decline to the desired level.

The decision to keep the CBR rate stable followed rate increases in December and February that were aimed at stabilizing the exchange rate and helping persistent inflation begin to fall.

The exchange rate had risen nearly 18 percent since the previous monetary policy decision, easing concerns about inflation stemming from more expensive imports.

On Monday, April 30, the Central Bank of Kenya quoted the Kenyan shilling at 133.3 shillings against the US dollar, marking a significant appreciation since 7 February when the local currency stood at 160.18 shillings.