Kelvin Bowoto
According to data, Kenya’s overall year-on-year inflation rate fell to 5.7% in March 2024, down slightly from 6.3% in February.
Kenya’s transportation prices climbed by 9.7% between March 2023 and March 2024, as did housing and utilities (up 8.0%) and food and beverages (up 5.5%). However, the cost of these items declined in March as the Kenyan shilling strengthened against the dollar, currently trading at KES 132 to the dollar.
Despite these increases, the costs of moving commodities, maintaining dwellings, and purchasing necessities remain high, indicating a high cost of living during this time period.
“These three divisions [cost of moving goods, home maintenance, and purchasing essential items] account for over 57% of the weights of the 13 broad categories,” according to a statement from the Kenya National Bureau of Statistics (KNBS).
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Consumer pricing indices and inflation rates are derived from monthly survey data. These surveys look at how much products and services cost in shops and retailers. The KNBS then selects a variety of items that Kenyans frequently purchase. The polls are conducted in the second and third weeks of each month and span various places around Kenya, with stores chosen to represent what people buy.
Kenya’s central bank (CBK) and others in East Africa are altering interest rates to help their failing economies cope with inflation, currency weakness, and global supply concerns. This suggests that there appears to be a shift away from utilizing coordinated global monetary policy to manage rising prices.
In February 2024, the CBK lifted its policy rate to 13% from 12.5%, the highest increase in 12 years. This move is expected to result in higher borrowing fees for borrowers.
“The proposed action will ensure that inflationary expectations remain anchored while setting inflation on a firm downward path towards the five per cent midpoint of the target range, as well as addressing residual pressures on the exchange rate,” said Kamau Thugge, CBK governor, in a statement to the East African.
Techrectory with Agency Report.
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