Private firms in the country reported the highest increase in product pricing as inflation rose to its highest yet in November.
This is according to the Stanbic Bank Purchasing Manager’s Index (PMI) which reported that the rise accelerated the quickest since February and broadly aligned with the long-run average.
The firms attributed the increase to a change in the cost of production as well as improved sales volumes.
In a Kenya National Bureau of Statistics (KNBS) report last week, the country reported a 2.8 per cent rise in consumer prices in November compared to a 2.7 per cent in October.
This rise was attributed to a 4.5 per cent annual rate increase in food and non-alcoholic drinks prices.
In an address in October, President William Ruto announced an ambitious plan to keep Kenya's inflation below three percent.
“It is my target that next year, inflation will be sub-three per cent. That is the target that we have. And as we bring down inflation and reduce the cost of living, we stabilize the exchange rates and make sure that we are much more predictable,” stated President Ruto.
The PMI report went on to state that the production cost in private firms also reported an increase during the month, maintaining a three-month steady increase.
This rise was much slower than the previous three months’ series rise which saw June, July, and August report higher numbers.
Of the five sectors monitored, only the manufacturing sector did not report a high cost.
The report further indicated that the high production cost was due to an increase in purchase prices which rose to the highest rate in November since August.
This rise was in turn attributed to the high taxation currently plaguing the nation.
Despite this, however, salaries of employees in the private sector significantly dropped, hitting just below the 50.0 threshold.
The seasonally adjusted staff costs index dropped for the first time in ten months.
