Kenya inflation rises to 15.53 pct in July
kenya, money, thewall 8:57 AM
NAIROBI (Reuters) - Kenya's inflation rose for the ninth month running in July to 15.53 percent year-on-year from 14.49 percent in June, driven by higher food prices and rises in other items including housing.
Too much money, few goods results in inflation
The Kenya National Bureau of Statistics said the consumer price index rose 1.27 percent in July from a month earlier, after a 1.19 percent rise in June, driven by a 1.71 percent increase in food and non-alcoholic beverages.
This rise was attributed to price increases for maize flour, maize grain, sugar and rice, the statistics body said.
Kenya is experiencing a drought that has ravaged the Horn of Africa region and led to food shortages. At the same time, the decline of the shilling has seen the cost of imports, especially oil, increase.
Kenya's central bank surprised markets by leaving its benchmark interest rate unchanged at 6.25 percent last Wednesday, saying its monetary policy was tight enough and that any further tightening would be counter-productive.
The bank has said it expects the year-on-year inflation rate to slow to 7.5 percent by the end of 2011, arguing that rising food and fuel prices in east Africa's biggest economy are due to temporary, external factors, which will moderate by the end of the year.
Analysts said they expected inflation to continue rising.
"I don't see inflation relenting in the next few months ... (because) it is attributed to high oil prices which we have no control over and food prices due to the drought," said John Mutua, the program officer at Institute of Economic Affairs.
"Unless we get (enough) imports to cover the shortfall of grains (maize), inflation will continue to rise."
Others said the apparent lack of decisive action to tackle double-digit inflation meant that Kenya would lose out when competing for foreign investment flows seeking higher yields.
Too much money, few goods results in inflationThe Kenya National Bureau of Statistics said the consumer price index rose 1.27 percent in July from a month earlier, after a 1.19 percent rise in June, driven by a 1.71 percent increase in food and non-alcoholic beverages.
This rise was attributed to price increases for maize flour, maize grain, sugar and rice, the statistics body said.
Kenya is experiencing a drought that has ravaged the Horn of Africa region and led to food shortages. At the same time, the decline of the shilling has seen the cost of imports, especially oil, increase.
Kenya's central bank surprised markets by leaving its benchmark interest rate unchanged at 6.25 percent last Wednesday, saying its monetary policy was tight enough and that any further tightening would be counter-productive.
The bank has said it expects the year-on-year inflation rate to slow to 7.5 percent by the end of 2011, arguing that rising food and fuel prices in east Africa's biggest economy are due to temporary, external factors, which will moderate by the end of the year.
Analysts said they expected inflation to continue rising.
"I don't see inflation relenting in the next few months ... (because) it is attributed to high oil prices which we have no control over and food prices due to the drought," said John Mutua, the program officer at Institute of Economic Affairs.
"Unless we get (enough) imports to cover the shortfall of grains (maize), inflation will continue to rise."
Others said the apparent lack of decisive action to tackle double-digit inflation meant that Kenya would lose out when competing for foreign investment flows seeking higher yields.
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