Kenya has experienced a fall in inflation for June, which is a positive development, thanks to Kamau Thugge, the recently appointed governor of the central bank, who has demonstrated a strong dedication to the cause.
The Kenya National Bureau of Statistics reported that consumer prices increased by 7.9% in comparison to the previous month’s 8% increase.
In addressing the issue of rising costs, Governor Kamau Thugge reportedly wasted no time, emphasizing how excessive inflation negatively affects people’s real salaries.
The central bank promptly increased the benchmark interest rate, the biggest hike since July 2015, by a substantial one percentage point.
Governor Thugge expressed confidence that inflation will steadily decline and reach the goal range of 2.5% to 7.5% by September, even though it is anticipated to stay high in the upcoming months.
However, difficulties still exist as a result of recent increases in electricity costs and the adoption of additional taxes, such as the increased value-added tax on gasoline.
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The expected drop in this year’s rice harvest, a vital staple food for many Kenyan households, is cause for alarm. According to the Ministry of Agriculture, this decline from 2.1 million bags in 2022 to 1.2 million bags in 2023 may have an effect on price stability.
The government has decreased import taxes on rice from 75% to 35% in order to lessen the impact, ensuring a steady supply and stable prices.
Less expensive energy and transportation costs are responsible for the decrease in inflation. From 10.1% in May to 9.4% in June, transportation costs dropped.
In a similar vein, the inflation rate in the housing, water, electricity, gas, and other fuel sectors decreased from 9.7% to 9.4%.
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However, ongoing worries center on food prices, which greatly influence the overall consumer price index. Nearly one-third of the index in June was made up of food prices, which had an inflation rate of 10.3% in June, up from 10.2% in May.
The price of sugar increased significantly year over year by 58.1%, which contributed to the increase.
