In December 2023, higher-income households in Nairobi experienced a notable surge in consumer prices, deviating from the usual trend where inflation predominantly affects lower-income residences. Data from the Kenya National Bureau of Statistics (KNBS) revealed an inflation rate of 6.62 percent for upper-income households in Nairobi, contrasting with 6.16 percent for the middle-income bracket and 6.35 percent for lower-income households.
The KNBS defines Nairobi’s upper-income group as households spending over Sh184,395 per month, constituting 3.5 percent of the capital’s households. In contrast, lower-income households, spending Sh46,355 or less per month, make up 70.899 percent, while the middle-income group, spending Sh46,356 up to Sh184,394 per month, constitutes 25.58 percent.
The surge in inflation for higher-income households is primarily attributed to elevated pump prices, where the affluent faced a more pronounced impact from increased transportation costs compared to lower and middle-income households. In December, transportation costs recorded the sole double-digit inflation rate, subjecting higher-income households to greater consumer price hikes.
According to additional KNBS data, transport costs carry a weight of 17.63 percent in expenditures for Nairobi’s upper-income households, compared to 9.25 percent and 14.14 percent for lower and middle-income groups, respectively. This indicates that heightened transport costs disproportionately affect higher-income households.
Nairobi’s higher-income households allocate more spending towards transport, health, furnishings, household equipment, routine household maintenance, restaurants, accommodation, insurance, and financial services than their lower and middle-income counterparts. Notably, spending on transport surpasses expenditure on food, constituting 16.81 percent of their income.
However, households outside Nairobi face the highest inflation rates, with the cost of living recorded at 6.84 percent in December 2023, exceeding the average of 6.63 percent for the month. KNBS collects data from specific areas to represent different income categories within Nairobi.
