The Lower Eastern Times Opening The Third Eye
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The inflation rate in March hit a two-year low of 5.7 percent, a significant drop from February’s 6.3 percent and January’s 6.9 percent, primarily driven by reduced prices of food items, fuel, and electricity.
According to the Kenya National Bureau of Statistics (KNBS), price adjustments in essential categories such as food, energy, and transportation, which collectively constitute approximately 57 percent of household expenditures, were the primary contributors to the decrease in inflation.
The Food and Non-Alcoholic Beverages Index experienced a modest 0.5 percent increase between February 2024 and March 2024. However, while the prices of items like maize flour, sugar, and fortified maize flour saw declines ranging from 5.1 percent to 9.6 percent, the prices of onions, mangoes, and Irish potatoes surged by 11.1 percent, 8.0 percent, and 7.7 percent, respectively.
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Similarly, the Housing, Water, Electricity, Gas, and Other Fuels Index rose by 0.2 percent, primarily due to increased gas prices by 1.4 percent, while kerosene prices declined by 2.3 percent. Additionally, electricity tariffs for both 200 kWh and 50 kWh decreased by 0.3 percent and 0.4 percent, respectively.
The Transport Index also experienced a decline of 0.6 percent, attributed mainly to the reduced prices of petrol and diesel by 3.5 percent and 2.6 percent, respectively.
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The strengthening of the Kenyan shilling against the US dollar further contributed to the easing of the cost of living, as Kenya remains a net importer. The shilling has experienced a consistent upward trend against the dollar over the past two months, with expectations of further strengthening in the medium term, fueled by the successful settlement of the inaugural $2 billion Eurobond buyback plan due in June this year.
The Central Bank of Kenya reported the shilling at 131.8 against the dollar for the week ending March 28, representing a significant gain of about 19 percent from its lows of 161 in the past two months.
The improved stability of the shilling has positively impacted import costs, thereby alleviating the burden on consumers, who were previously affected by higher input costs for manufacturers due to a volatile currency.
