Monthly data from the Kenya National Bureau of Statistics (KNBS) shows a decline in inflation and Consumer Price index (CPI) in August.
The inflation rate recorded a 0.9% decline in August to 5% from 6.3% recorded in July largely due to a decline in food prices. On the other hand, CPI in August was 201.78 from 203.61 recorded in July.
It follows a five months trend as the decline in food prices was attributed to favorable weather conditions. In this case, the prices of significant food items such as Sukuma wiki (Kales), potatoes, cabbages, carrots, tomatoes, and maize grain decreased.
During the month, Housing, Water, Electricity, Gas, and other fuel index decreased by 0.10 percent. For instance, the cost of a 13kg cylinder of LPG fell by 0.98 percent from KSh2171 in July to KSh2150.27 in August.
However, inflation is still higher than in August 2018 that stood at 4.04% while CPI was 192.18.
CBK foreign exchange and current account
Additionally, data from the Central Bank of Kenya (CBK) indicates that the Kenyan shilling remained relatively stable against major international and regional currencies average KSh102.96 – KSh103.48 against the dollar.
The foreign exchange reserves as at August 29 remained adequate at $9252 million (5.78 months import cover), a decline from the $9568 (6.01 months import cover) recorded in July.
Moreover, the current account deficit narrowed to 4.2 percent of the GDP in the 12 months to July 2019 from 5.0 percent in December 2018. This reflects a resilient performance of horticulture exports, strong growth in diaspora remittances, higher receipts from tourism and transport services and slower growth of imports.
A decline in Equity Markets
The NASI, NSE 25, NSE 20 share price indices declined by 1.5 percent, 0.8 percent, and 0.9 percent respectively during the week ending August 29. Similarly, market capitalization, equity turnover, and shares traded decreased by 3.0 percent, 66.5 percent, and 68.4 percent respectively.
