Kenya's cost of living edged higher in July, reversing last month's slight easing, as persistently high transport costs linked to elevated fuel prices continued to ripple across the economy.
Households witnessed high transport costs, with increases in the prices of some food commodities, housing and other essential goods and services.
Latest data from the Kenya National Bureau of Statistics (KNBS) shows annual inflation rose to 6.5 per cent in July, up from 6.4 per cent in June, although still below the 6.7 per cent recorded in May.
On a monthly basis, consumer prices increased by 0.2 per cent, with the overall Consumer Price Index (CPI) rising from 154.91 in June to 155.20 in July.
The increase means consumers continued paying more for a basket of everyday goods and services compared to the same period last year, despite a modest decline in the pace of food inflation during the month.
According to KNBS, the rise in inflation was largely driven by higher prices in Food and Non-Alcoholic Beverages (9.0 per cent), Transport (15.6 per cent) and Housing, Water, Electricity, Gas and Other Fuels (3.2 per cent).
“The three categories account for more than 57 per cent of household spending captured in the inflation basket,” director general, Macdonald Obudho, notes.
Transport remained the biggest pressure point, reflecting the knock-on effect of expensive fuel on the movement of people and goods.
Although retail pump prices of petrol and diesel remained unchanged in July at Sh214.95 and Sh224.04 per litre respectively, they were significantly higher than a year earlier, with diesel prices up 29.7 per cent and petrol up 14.7 per cent.
City bus and matatu fares also remained elevated, increasing 16.8 per cent over the past year.
Higher transport costs have continued to filter through supply chains, raising distribution costs for manufacturers, retailers and farmers and ultimately translating into higher prices for consumers.
Food prices also remained under pressure despite some relief in key staples.
The statistics agency said tomatoes became 3.7 per cent cheaper in July compared to June, while carrots declined 3.6 per cent and sifted maize flour fell 1.6 per cent.
However, prices of potatoes increased 2.1 per cent, mangoes rose 3.2 per cent, while beef and kale also became more expensive during the month. Overall, food prices were 9.0 per cent higher than a year ago.
Housing-related expenses also continued weighing on household budgets.
While the cost of refilling a 13-kilogram LPG cylinder declined 1.1 per cent during the month, electricity bills increased sharply, with tariffs for households consuming 50 kilowatt-hours rising 3.5 per cent and those using 200 kilowatt-hours increasing 3.1 per cent. House rents also posted marginal increases.
Beyond the major expenditure categories, inflation was also recorded across health, clothing, restaurants, education and household goods, although at much slower rates ranging between two and three per cent.
Information and communication remained among the most stable sectors, recording annual inflation of just 0.6 per cent.
The data indicates that underlying inflationary pressures remain elevated.
KNBS reported that core inflation, which excludes volatile items such as unprocessed food and energy, increased slightly to 3.2 per cent in July from 3.1 per cent in June.
Meanwhile, non-core inflation, which captures largely volatile food and energy prices, remained high at 15.0 per cent, highlighting the continued impact of fuel and food costs on household budgets.
“Food and non-alcoholic beverages contributed the largest share of overall inflation at 2.6 percentage points, followed by transport at 1.5 percentage points, underscoring the dominant role played by fuel-related costs in driving inflation,” KNBS says in its July report.
The latest inflation reading suggests that although price pressures have moderated from May's peak, Kenyan households and businesses continue to face a challenging operating environment as elevated transport costs keep feeding into the prices of essential goods and services across the economy.
