Inflation drops to 4.3 per cent due to reduced food, power costs in July

This is from the previous month's record of 4.6 per cent.

The record for July is the lowest in the last four years, with the last record being in August 2020.

The latest figures by the Kenya National Bureau of Statistics (KNBS) show prices of tomatoes, wheat, flour-brown, onion-leeks, bulbs, and maize flour-sifted dropped by 5.5, 4.2, 4.1, and 3.3 percent, respectively, between June and July 2024.

As a result, the Food and Non-Alcoholic Beverages Index decreased by 0.5 per cent within the period under review.

Conversely, prices of cabbages and carrots increased by 8.1 per cent and 1.8 per cent, respectively, between June and July.

The Housing, Water, Electricity, Gas, and Other Fuels' Index declined by 0.4 per cent, attributable to decreases in prices of 200 kWh of electricity, 50 kWh of electricity, and kerosene by 9.4, 4.4, and 0.8 per cent, respectively.

However, gas and LPG prices increased by 0.2 per cent during this period.

The transport index, on the other hand, dropped by 0.1 per cent between June and July 2024, mainly due to a 0.5 and 0.9 per cent decrease in petrol and diesel prices, respectively.

Year-on-year, the 4.3 per cent mark means the general price level in July 2024 was 4.3 per cent higher than that of July 2023.

Between July 2023 and July 2024, the price increases of commodities under Food and Non-Alcoholic Beverages (5.6%), Transport (4.0%), and Housing, Water, Electricity, Gas, and Other Fuels (3.9 per cent) primarily drove the price increase.

The three divisions account for over 57 per cent of the household's consumed commodities.

The sixth consecutive drop in inflation sets the stage for the next review of the base lending rate by the Central Bank of Kenya (CBK), slated for August 6.

The apex bank uses the rate to tame rising inflation, ensure inflationary expectations remain anchored and set inflation on a firm downward path towards the 5.0 per cent midpoint of the target range.

In the past three reviews, CBK maintained the rate at a high of 13 per cent on account of taming inflation, which had hit a high of nine in March last year.