The Consumer Price Index rose to 5% in October an increase from September’s 3.8% inflation rate. The increase is as a result of higher food prices.
Food prices, the most significant component of the Consumer Price Index, contributing 36% of the CPI, rose by 8.7%. At the same time, the cost of transport increased by 2.5%. Data from the Kenya Bureau of Statistics (KNBS) reveals that in October, the rate of inflation rose by 3%.
SEE ALSO: Inflation and CPI declines in August
Kenya’s rate of inflation averaged at around 5.2% between September 2018 and October 2019. Lower energy prices helped control pressures from rising food prices, maintaining a rate within the 2.5% and 7.5% target.
Beyond food and fuel prices, Kenya maintained core inflation below 5% for the past three years. The figure shows reduced demand in the economy.
However, the country runs the risk of higher inflation owing to weather-related shocks. Lower rainfall patterns will hamper the generation of electricity as well as lower agricultural produce.
Such uncertainties could increase the prices of food and fuel, essential contributors to the CPI index. In turn, the effects would lower purchasing power and dampen economic growth.
