With May 2012 almost coming to an end, we should expect Kenya National Bureau of Statistics (KNBS) to release Consumer Price Indices (CPI) and rates of inflation for May 2012 by the end of this week. Statistics that will help determine how economic friendly or unfriendly May 2012 was.
To recap on April’s CPI and inflation rates, the CPI increased by 0.92 per cent from 132.51 in March 2012 to 133.74 in April 2012. This increase was attributed to increase in food and non-alcoholic drinks’ index which rose by 1.21 per cent- mainly due to escalation in prices of some food products such as milk, potatoes, maize flour and onions. Housing, water, electricity, gas and other fuels’ index also went up by 0.89 per cent between March and April 2012 with the prices of electricity and kerosene going up by 1.5 per cent. The transport index also rose by 1.67 per cent between March 2012 and April 2012 due to higher costs of diesel, petrol and bus/matatu fares.
Despite the above observed increases in respect to most of the indices between the two consecutive months of March and April 2012, the overall year in inflation continued to decelerate due to the base effect in the inflation computation, standing at 13.06 per cent in April.
We predict a further rise in housing, water, electricity, gas and other fuels’ index due to increase in price of kerosene. We also expect the transport index to increase due to higher costs of petrol and bus/matatu fares, reflecting in a further increase in CPI.
Despite the predicted increase in respect to the above indices, we expect the overall year on year inflation to continue decelerating as it has been the case in the recent past.
It is though important to note that our predictions are based on our analysis of the previously released CPI and inflation rates. The exact figures will be known at the end of the end of the week when KNBS releases their statistics on the same.