Inflation
The average inflation rate increased to 5.9 % in H1 ’ 2021 , compared to 5.6 % in H1 ’ 2020 , attributable to the sharp increase in oil prices in H1 ’ 2021 , which are up 43.3 %.
Inflation for the month of June 2021 came in at 6.3 %, the highest since February 2020 , and an increase from the 5.9 % recorded in May , attributable to a 13.5 % increase in the fuel index , an 8.5 % increase in the food and beverages index and a 2.6 % increase in the Non-food and fuel index during the month .
Fiscal Policy
The Kenyan budget for the FY ’ 2021 / 2022 National Budget is projected at Kshs 3.7 Trillion , a 11.9 % increase from the Kshs 2.9 Trillion final FY ’ 2020 / 21 budget . The government projected that total revenue will increase by 10.3 % to Kshs 2.0 Trillion , from the Kshs 1.8 Trillion in FY ’ 2020 / 2021 , with the increase largely being projected to come from ordinary revenue . The projected revenues were mainly pegged on Kenya ’ s economic recovery , broadening the tax base and tax reforms .
On the FY ’ 2021 / 2022 outturn , it is projected that the government shall be below its budget having spent Kshs 2.4 Trillion , equivalent to 80.1 % of the revised budget of Kshs 2.9 Trillion and the total collections stood at Kshs 2.4 Trillion , equivalent to 80.1 % of the revised target of Kshs 2.9 Trillion for the first 11 months of FY ’ 2021 / 2022 . The total borrowings stood at Kshs 895.0 Billion as at 31 May 2021 , equivalent to 70.3 % of the revised borrowing target of Kshs 1.3 Billion .
CPF Spotlight | Edition 02 5