Cost of living holds amid corona : The Standard

The prices of consumer products increased by 6.37 per cent in March compared to 6.06 per cent recorded in February. The slow rate of increase, also known as inflation, was due to an abundant supply of critical foods, and comes despite cases of the coronavirus disease being recorded in Kenya in the last two weeks of March. The effects of the Covid-19 pandemic, which has curtailed the movement of goods, are expected to be fully felt in coming months. Year-on-year, the price of a kilogramme of tomatoes, whose high prices had been the butt of online jokes in February, and which increased by 62.4 per cent that month, increased by a slower rate in March.

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A kilogramme of tomatoes in March retailed at Sh120.6 compared to Sh128.39 in February. But this price was still high compared to March 2019 when a kilogramme of tomatoes cost Sh96.90. Year-on-year increases in the prices of other food commodities like rice, spinach and sugar declined in the review period.

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The food index rose by 0.55 per cent between February and March 2020, while year-on-year food inflation stood at 11.85 per cent, according to Kenya National Bureau of Statistics (KNBS) data released yesterday. “The increase was mainly driven by an increase in 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 KNBS.

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The cost of living data comes at a time when the national statistician has shifted to a new base period for generating a basket of goods and services – the Consumer Price Index (CPI). In addition to moving the base period to February 2019 from 2010, several products have been added to the new CPI. Products like airtime have been given a lot of weight, even as the fraction of money Kenyans spend on food has reduced. The new addition is a strong indicator of an improved standard of living. Besides being used to calculate the rate of inflation, CPI is also important for general economic and social analysis, including policy formulation, said Churchill Ogutu, a research analyst at Genghis Capital. He added that CPI is also used in adjusting taxes and to determine, among other things, wage levels in the event of trade disputes, social security benefits, public service remuneration and in computing pension benefits.

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Covid-19Ministry of healthCoronavirus