Kenya’s annual inflation remained stable at 3.25% this December, a slight change over November’s 3.20% due to what the country’s statistics body attributed to a slight drop and rise in the prices of key consumer goods.
The Kenya National Bureau of Statistics (KNBS) said Friday in its monthly inflation bulletin that the food and non-food prices increased by 0.77% during the month, driven by a combination of factors.
The prices of electricity, water and housing increased by a combined rate of 0.06% in December, while transport costs edged up by 1.55% due to hiked prices of transport during the Christmas festivities.
“A combination of significant rises and drops in average prices of several food items were noted compared to December 2011,” KNBS said.
Sugar prices ended the year 24.8% lower, followed by electricity prices, which dropped 21.6% lower in 2012. The prices of Liquefied Petroleum Gas (LPG), mostly known as cooking gas, dropped 20.6%.
Kenyan consumers generally enjoyed a more stable micro-economic environment in 2012, buoyed by good rains which boosted electricity output.
The price of petrol and other fuels also remained largely stable but remained 10.3% lower than December 2011.
Electricity prices dropped from Ksh. 584 (US$6.68) for every 50kwh to Ksh. 577 (US$6.60) in December. Petroleum prices also reflected price stability and the largely stable environment in the Middle East.
The stabilising inflation is expected to inspire further revision of the Central Bank rate and ignite a further lowering of the interest rates, whose rise during the first quarter left the East African nation in a near economic recession, with growth at a paltry 0.5%.