Kenya’s inflation rate ticked up slightly in August, ending a six-month streak of declines. The Consumer Price Index (CPI) rose to 4.4% in August from 4.3% in July, primarily driven by increases in food, energy, and transportation costs.
Despite the uptick, the annual inflation rate remains comfortably within the government’s target range of 2.5% to 7.5%. This positive development has allowed the Central Bank of Kenya (CBK) to maintain a relatively accommodative monetary policy.
The slight increase in August’s inflation rate was primarily due to a 0.3% rise in the Transport Index, driven by higher country bus fares. While petrol and diesel prices remained stable, the overall transportation costs rose.
On the upside, the Food and Non-Alcoholic Beverages Index declined by 0.7% between July and August, thanks to lower prices for certain vegetables like tomatoes, spinach, and onions. However, this decrease was partially offset by rising prices of Irish potatoes, oranges, and mangoes.
The CBK’s Monetary Policy Committee recently revised the benchmark interest rate downwards to 12.75%, citing easing inflation and a stronger shilling. This decision is expected to provide a boost to economic growth while maintaining price stability.
ALSO READ; https://financialday.co.ke/2250/kenyas-inflation-eases-to-6-7pc-in-august/
