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Inflation bites hard at Nairobi’s middle class

Inflation for Nairobi’s middle class jumped by the biggest margin last month among income classes on rising rent and transport costs.

Data from the Kenya National Bureau of Statistics (KNBS) shows inflation for the middle income group rose to 4.63 per cent in June from 3.76 per cent the previous month — representing a 0.87 percentage increase.

The cost of living measure for the city’s wealthy dropped by 0.09 percentage point to 1.77 per cent while that of low-income earners rose by 0.34 percentage point to 7.32 per cent.

The differences in the inflation levels among income segments is linked to their different consumption patterns, with the rich spending most of their income on utilities and transport while food takes the largest share of the poor’s budget.

“Transport and food from restaurants and hotels had the highest impact on the middle income group compared to the other categories,” KNBS director of production statistics James Gatungu said.

“For instance, under transport, the cost of international flight, petrol and city bus/matatu affected the middle-income group more than the other groups,” he added.

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SOURCE: Business Daily