Kenya’s June Inflation Unchanged, Food Prices Expected to Increase Next Month
Kenya’s June inflation rate remained unchanged at 7.9 per cent compared to last year and 8.0 per cent in May of this year.
Inflation was largely driven by a 10.3 per cent increase in prices of commodities under food and non-alcoholic beverages between June 2022 and June 2023.
Increased Fuel Prices to Push up Food Prices in July
Despite this, with a record increase in fuel prices slated to come into effect as of July 1st following the doubling of VAT on petroleum products to 16 per cent, the cost of food production is expected to be on the rise this month.
Diesel– the most commonly used fuel in agriculture– is expected to retail for a historic Sh179.67 per liter. According to the Energy and Petroleum Regulatory Authority (EPRA), the maximum allowed increase per liter for diesel will be Sh12.9, Sh13.49 for super petrol, and Sh11.69 for kerosene.
The enactment into law of the Finance Act 2023 is also expected to weaken spending power as new levies, taxes, and contributions come into effect.
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June Agrocommodity Prices
According to data from the Kenya National Bureau of Statistics (KNBS) for the month of June, the prices for carrots, onions (leeks and bulbs), tomatoes, and maize grain increased by 9.0, 7.3, 6.4 and 5.5 per cent, respectively between May 2023 and June 2023.
During the same period, prices of potatoes, avocados, kale (sukuma wiki) and cabbages declined by 6.1, 4.6, 2.7, and 0.3 per cent, respectively.
In other economic indicators, the overall year-on-year inflation rate for housing, water, electricity, gas, and other fuels was 9.4 per cent and 9.4 for transport as well.
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