The year-on-year Kenya’s Inflation Rate rate as measured by the Consumer Price Index (CPI) was 4.4 per cent in August 2024. This means that the general price level was 4.4 per cent higher in August 2024 than it was in August 2023, according to the latest data from the Kenya National Bureau of Statistics (KNBS).
The annual Kenya’s Inflation Rate was mainly due to an increase in prices of commodities under the following Classification of Individual Consumption by Purpose (COICOP) divisions, Transport Index (3.9%), Housing, Water, Electricity, Gas and Other Fuels Index (4.2%), Food and Non-Alcoholic Beverages Index (5.3%) between August 2023 and August 2024.
These three divisions account for over 57 per cent of the weights of the 13 broad categories. The Alcoholic Beverages, Tobacco and Narcotics year on year index rose by 8.2 per cent. The CPI and inflation are generated from data collected through the monthly survey of retail prices that targets a representative basket of household consumption goods and services.
The data collection is conducted in the second and third weeks of the month from a representative sample of outlets located in 50 data collection zones across the country. The Food and Non-Alcoholic Beverages Index decreased by 0.7 per cent between July 2024 and August 2024. In particular, prices of tomatoes, spinach, onion-leeks and bulbs and kale-sukuma wiki decreased by 12.0, 6.7, 5.6 and 4.6 per cent, respectively, between July 2024 and August 2024.
During the same period, prices of potatoes (irish), oranges and mangoes increased by 7.1, 3.2 and 2.6 per cent, respectively between July 2024 and August 2024. The Housing, Water, Electricity, Gas and Other Fuels’ Index increased by 0.3 per cent between July 2024 and August 2024 attributable to rise in prices of 200 kWh of electricity and 50 kWh of electricity by 1.6 per cent and 1.8 per cent, respectively.
The Transport Index increased by 0.3 per cent between July 2024 and August 2024 mainly due to increase in prices of country bus fare. During the same period, prices of petrol and diesel remained the unchanged. The Alcoholic Beverages, Tobacco and Narcotics Index rose by 1.9 per cent between July 2024 and August 2024. This was mainly driven by an increase in prices of cigarettes by 14.5 per cent between July 2024 and August 2024.
Consumer Price Index (CPI) is a key macroeconomic indicator used to monitor price movements and how they affect policy decisions. It is defined as a measure of the weighted aggregate change in retail prices paid by consumers for a given basket of goods and services. Year-on-year inflation is used mainly for economic decision making as current situation is compared to previous year situation, same period. The inflation rate is defined as a percentage change of the CPI between two periods.
Collection of retail prices for the compilation of the CPI is usually conducted during the second and third weeks of every month. Prices of different commodities are collected from selected retail outlets located in 50 data collection zones. Out of the 50 data collection zones, 14 are in Nairobi City County while 36 are located in other urban areas. Nairobi zones cover outlets in lower income, middle income and upper income areas.
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