Welcome to this week’s edition of Money Weekly.
In this edition, we bring you an all-around overview of the latest developments in the world of money and finance. From an ease in inflation characterised by a drop in food prices to the government disbursing Ksh2 billion toward the Inua Jamii Fund and the implementation of the housing levy being backdated to July 1, stick with us as we delve into the landscape of finances.
As we do every Thursday, here's our summary of the top money news from the last seven days and what they mean for your pocket.
In July, inflation declined to its lowest level in 13 months due to a decrease in certain food prices and lower energy expenses. As a result, inflation dropped below the government's threshold for the first time in almost 13 months.
The inflation rate fell to 7.3% from 7.9% in June, representing a 60 basis points decrease, bringing it within the Central Bank's target range.
Just one month after the central bank raised its benchmark lending rate to 10.5%, up from the previous 9.5%, citing sustained inflationary pressure, Kenya has experienced a significant decline in inflation.
According to data from the Kenya National Bureau of Statistics(KNBS), the largest year-on-year decline was seen in the prices of LPG (cooking gas) at 10.1%, followed by tomatoes at 9.8%. However, the steepest increase was observed in matatu fares, rising by 40%.
This drop in inflation is mainly attributed to the decrease in the prices of cooking gas (LPG) and electricity.
Specifically, during the review period between June 2023 and July 2023, the prices of a 13kg gas cylinder, 200 kilowatts of electricity, and 50 kilowatts of electricity decreased by 9.2%, 5.3%, and 4.4%, respectively.
The government has disbursed a sum of over Ksh2 billion shillings to the Inua Jamii Fund, as announced by the Ministry of Labour and Social Protection.
The funds have been allocated to support vulnerable groups, including orphans, Persons Living with Disabilities (PLWDs), and senior citizens.
On Monday, Joseph Motari, the Principal Secretary for Social Protection and Senior Citizens Affairs announced that the government through the Ministry of Labour and Social Protection, made an additional transfer of Ksh4.3 million for the complimentary nutrition and health education program.
He stated that this funding is intended to support one million beneficiaries, with each individual receiving Ksh2,000 monthly.
Motari emphasised the ministry's commitment to ensuring that these payments are made promptly between the 15th and 20th of each month, as directed by the President.
Last week, Motari announced the release of over Ksh8.36 billion for the program after a delay. This funding covered the second tranche for the months of March, April, May, and June.
The government will backdate the mandatory contribution for the Housing Levy, as proposed in the Finance Act of 2023, to July 1.
This decision comes after the Court of Appeal lifted the orders that were preventing the implementation of the Act last week.
Both employee and employer are required to contribute to the levy at a rate of 1.5% of the employee's gross monthly salary.
The collection of the Housing Levy will be managed by the Kenya Revenue Authority, acting as the collection agent.
Over the past month, public transport vehicle (PSV) operators have raised fares by at least Ksh10, impacting consumers significantly due to recent fuel price increases.
The fare increase is nearly 50% higher compared to a similar period in July last year, as PSVs nationwide take into account and pass on the recent fuel price hikes.
The latest data from the Kenya National Bureau of Statistics (KNBS) reveals that all routes across the country have been affected by these substantial fare hikes.
"The Transport Index went up by 3.5% between June 2023 and July 2023 mainly due to increase in prices of petrol and diesel, which rose by 6.9% and 7.4%, respectively," said KNBS yesterday while releasing July inflation figures.
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