M-Pesa, Pay TV included in New Inflation Measure

Dennis Gitau | Mar 31, 2020

Up until recently, obsolete goods like radio and video cassettes were included in the calculation of the inflation rate. However, this is about to change as the measure has been reviewed to exclude such items and integrate more modern goods such as pay TV subscription, transfer fees for mobile money and charges associated with garbage collection.

The new system, according to the Kenya Bureau of Statistics (KNBS), will be implemented from Tuesday, the 31^st of March 2020 to facilitate the release of the month’s inflation figures.

In addition to this, the new structure will include the publication of reports every quarter relating to the rate of job creation in the country, job loss, and underemployment, which are indicators of the health of an economy.

According to a statement made by the director general of KNBS, phone airtime is the highest expenditure item in the revised consumer price index (food component not included). This is after it saw an increase in its overall weight from 3.086% to 5.496%.

The new inflation basket has a total of 330 items as compared to the previous 234. Additionally, the zones from which data is collected have doubled to 50.

The new items on the inflation measure include phone airtime, bus/matatu fare and the amount of rent charged for a single room. Others include restaurant and hotel food, beef, beer, bread, and fresh milk. With Kenyans in rural areas now having access to alternative sources of fuel, kerosene has been dropped from the top 10 expenditure items.

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