Kenya’s annual inflation rose to 4.45% in February from 3.67% in January, mainly due to the rise in local food prices and the cost of housing, the Kenyan National Bureau of Statistics (KNBS) said Thursday.
KNBS said the cost of basic consumer goods, such as alcoholic drinks, rose by 1.29% while the cost of clothing rose by 0.21%. Key groceries showed the highest rise in prices at 7.52% for Milk and 8.76% for vegetables.
According to James Gatungu, the Statistics Production Director, between January and February, food and non-food prices contributed the most to the upsurge in the annual inflation this month.
“The are the consequence of rises and fall in average prices of food, house and water, electricity and gas, which went up by 0.39%,” Gatungu said.
Meanwhile, the East African nation is bracing up for below normal rains, which might suggest that a drought is looming this year. This might lead to higher inflation, causing the price of bank loans to rise.
Kenyan Meteorological department said Wednesday the long rains starting next month might be below normal. This would affect Kenya’s electricity generation, which is mostly hydro power based.
A rise in the inflation to 20% in 2011 led to the cost of loans shooting up to 30%, affecting economic growth to a larger percentage.
However, the effects of election spending in Kenya also remains unknown.
