Kenyans close the year with emptier pockets as December inflation spikes to 5.6%
Kenyans pain at the close of the year has been exacerbated by thinning disposable income with the rate of inflation spiking to 5.6 per cent in December from 5.3 per cent in November.
This is the highest rate of inflation since April 2020 when inflation stood at a higher six per cent.
Higher food costs have remained as the greatest inflation driver in the last month with the food index increasing again by 2.4 per cent in the period.
“This food inflation was mainly attributed to increase in prices of particular food items, which outweighed decreases. For instance, retail prices of loose maize flour declined by 1.3 per cent while the prices of items such as sukumawiki rose by 8.1 per cent,” Kenya National Bureau of Statistics stated.
Meanwhile, Transport costs rose by 1.3 per cent mainly from increased retail costs for diesel and petrol at the middle of the month.
Moreover, housing, gas and water prices rose by 0.6 per cent in the period from a surge in the cost of electricity and kerosene.
The higher inflation rate is expected to trim back disposable income held by Kenyans in the New Year.
At the same time, the rate of inflation which had cooled down mid year is expected to rise in January from the reversal of tax measures such as VAT which touch on the pricing of key commodities such as fuel.
The rate of inflation has averaged 5.29 per cent in 2020.