Kenya’s inflation slows to 5.8% in August as food costs slide

By bne IntelliNews September 1, 2015

A further slowdown in food costs growth cut Kenya’s headline annual inflation to a six-month low of 5.84% in August from 6.62% in July, data from the Kenya National Bureau of Statistics (KNBS) showed. Thus, it remained within the government's medium-term target of 5% plus/minus 2.5pp for the 12th month in a row after a temporary breach last summer.

The prices of food and non-alcoholic beverages, which are the main inflation driver with a 36.04% weight in the CPI basket, rose 9.9% y/y, decelerating from a 12.1% y/y growth in July.

On the other hand, the prices of housing, water, electricity, gas and other fuels, which are the second biggest heavyweight with an 18.3% share in the basket, grew 2.7% y/y, speeding from a 2.2% y/y growth in July.

Transport costs, which have the third largest weight of 8.66%, fell 1.8% y/y, softening from a 2.5% y/y drop in July.

Kenya’s monthly headline inflation rate quickened to 0.21% in August from 0.07% the month before, as food prices eased 0.256% (-0.6% in July), the cost of housing, water, electricity, gas and other fuels grew 0.76% (+0.76% in July), and transport costs rose 1.42% (+0.93% in July).

On August 5, Kenya’s central bank maintained the benchmark interest rate at 11.5% after hiking it by a total of 300bp in June and July amid heightened inflationary pressures due to a sharp depreciation of its shilling currency and rising fuel prices.

y/y inflation rate Aug-15 Jul-15 Aug-14 weight
All items 5.84% 6.62% 8.36%        100   
Food and non-alcoholic beverages 9.93% 12.14% 10.85% 36.04
Alcoholic beverages, tobacco and narcotics 3.25% 3.12% 4.44% 2.06
Clothing and footwear 4.76% 4.91% 4.95% 7.43
Housing, water, electricity, gas and other fuels 2.66% 2.21% 6.98% 18.3
Furnishings, household equipment and routine household maintenance 4.10% 4.08% 5.44% 6.16
Health 4.96% 5.00% 6.37% 3.13
Transport -1.79% -2.46% 11.68% 8.66
Communication 1.20% 1.19% 0.67% 3.82
Recreation and culture 3.01% 3.36% 12.73% 2.25
Education 3.94% 3.86% 5.44% 3.14
Restaurant and hotels 5.03% 5.30% 6.86% 4.48
Miscellaneous goods and services 5.08% 5.26% 4.45% 4.52
Source: Kenya National Bureau of Statistics        

Related Articles

South Africa’s MTN to invest $350mn in Iranian broadband

South Africa’s MTN said it has agreed, on a non-binding and preliminary basis, to invest an initial $350mn into Iranian fixed broadband provider Iranian Net. The investment will give ... more

South Africa receives another downgrade to junk

Fitch Ratings on April 7 downgraded South Africa to junk status following the removal of Pravin Gordhan as finance minister and the enusing political crisis. Fitch's downgrade to 'BB+' ... more

S&P downgrades South Africa's credit rating to junk after cabinet reshuffle

Standard & Poor’s ratings agency has cut South Africa's sovereign credit rating to 'BB+' from 'BBB-' and the long-term local currency rating to 'BBB-' from 'BBB', both with a negative ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss