Consumer Price Index. Table 1. Annual Inflation Rates, Source: KNBS

Transcription

1 Consumer Price Index The overall annual rate of inflation, computed as a percentage of change in the consumer price index (CPI) over two consecutive 12 months periods, increased from 9.8 per cent in 2007 to 26.2 per cent in Table below shows annual inflation rates for the different income groups in Nairobi and the rest of urban areas over the last five years. In 2008, inflationary pressures were almost as twice as much for both the Nairobi lower income group and the rest of urban areas compared to the Nairobi middle/upper income category of the population The increase in overall inflation was mainly attributed to high food prices arising from the high cost of agricultural inputs, the post election violence that disrupted production and distribution of goods and services in the early part of 2008, the global economic turmoil and global food shortages. Underlying inflation which excludes food items from the CPI basket increased from 5.7 per cent in 2007 to 11.1 per cent in This was mainly due to high prices of petroleum products and electricity among other non-food items. Table 1. Inflation Rates, Income Group Nairobi Lower Income Inflation Nairobi Middle/Upper income inflation Nairobi Inflation Rest of Urban Towns Inflation Kenya Inflation Rate The Nairobi composite index is weighed as 0.8 for lower income group and 0.2 for middle/upper income group while Kenya composite index is weighed as for Nairobi and for the rest of Urban Towns. 2. The lowest income group comprises households with monthly expenditure below Ksh 10,000 in October The middle/upper income group comprises households with monthly expenditure above Ksh 10,000 in October 1997

2 A five year series of the of the CPI for the Nairobi lower, middle/upper, Nairobi combined, rest of urban areas and the whole of Kenya combined. In general, relatively higher CPI which translated to higher inflation rates were recorded for all categories and for the months in 2008 compared to The annual average CPI for Nairobi lower income group rose from in 2007 to in 2008 giving rise to annual inflation of 27.9 per cent as shown in Table In 2008, the highest CPI of was recorded in December for this income group while the lowest of was observed in January. The table 4.20 shows an average annual CPI of in 2007 and in 2008 for the Nairobi middle/upper income. This translates to an annual inflation of 14.0 per cent. The monthly CPI for this income group ranged from in January to in December. Table 2: Consumer Price Index for the Nairobi Lower Income Group, Month of the Year January February March April May June July August September October November December average

3 Table 3: Consumer Price Indices, Nairobi Middle/Upper income Group, Month of the Year January February March April May June July August September October November December Average Table 4: Consumer Price Indices, Overall Nairobi, January February March April May June July August September October November December Average

4 Table 4.22: Consumer Price Indices, Rest of Urban areas, January February March April May June July August September October November December Average Table 5: Consumer Price Indices, Kenya, January February March April May June July August September October November December Average

5 Table 4.24: CPI and Inflation by commodities, 2007 and 2008 Average Index 2007 Average Index 2008 Broad Item Group Weights (Percentage) % Change Food & Non- Alcoholic Drinks Alcohol & Tobacco Clothing & Footwear Housing cost Fuel & Power Household Goods & Services Health & Personal Care Transport & Communication Recreation & Education Personal Goods & Services Average of all items