New rebased CPI shows slight easing in inflation
Zachary Ochuodho @zachuodho
The cost of life declined slightly to 6.06 per cent in March down from 6.37 per cent recorded in February this year, new data released by the Kenya National Bureau of Statistics (KNBS) yesterday indicates.
Monthly Consumer Price Indices (CPI) increased by 0.18 per cent from 106.33 in February to 106.53 in March this year.
KNBS director general Zachary Mwangi said the overall year on year inflation in March stood at 6.06 per cent driven mostly by food and non-alcoholic drinks’ whose index increased by 0.55 per cent between February 2020 and March 2020 while the year on year food inflation in March, 2020 stood at 11.85 per cent.
According to the statistics, clothing and footwear increased by 0.03 per cent to hit 2.09 per cent, transport declined slightly by 0.10 per cent to reach 5.5 per cent while household equipment and routine and house maintenance increased by 0.06 per cent o 1.91
“As indicated, the increase was mainly driven by prices of some food items such as mangoes, Irish potatoes, onions and cooking oils which increased by 5.39, 2.33, 2.06 and 0.83 per cent, respectively,” said Mwangi.
During the same period, the prices of tomatoes and spinach dropped by 6.06 and 4.87 per cent. The cost of transport declined mainly due to the decrease in prices of petrol at 1.28 per cent.
This is the first statistics KNBS is issuing after revising the basket of goods and services used to compile the CPI to reflect changes in household expenditure and consumption patterns.
CPI will have a new basket of 330 items, compared to the previous basket of 234 items.
The weights in the rebased CPI have also been updated and the Expenditure Groups have been recalculated, based on the 2015/16 Kenya Integrated Household Budget Survey.
The review of the PPI was to reflect changed production patterns and a new industrial structure.
The Quarterly Labour Force Survey will more accurately measure key labour statistics, including labour force participation, employment and labour utilisation.
According to Mwangi, the revision had been guided by international best practices as well as the Common Market of Eastern and Southern Africa (Comesa) and East Africa Community Harmonised Consumer Price Index regulations.
Following the changes, items such as kerosene stove, radio/cassette/CD player and video cassette hire, which were previously used to compile the list are excluded in the new CPI.
Items such as “subscription fees-private (for instance DSTV), antennae (aerial)/satellite/decoder charges, courier services, garbage and refuse collection, mobile money transfer and university boarding fees are among the new entrants into the new CPI.
The top 10 non-food expenditure components include mobile phone airtime that has the highest expenditure in the new CPI with an overall weight of 5.496 per cent having changed from the 3.086 per cent recorded in the previous CPI.
Mwangi, said the CPI review process has been implemented in many stages beginning with preparing data for analysis to applying the recommended compilation methodology.