Friday November 30 2018
Kenya Annual Inflation Rate Edges Up to 5.58% in November
Kenya National Bureau of Statistics | Agna Gabriel | agna.gabriel@tradingeconomics.com

The annual inflation rate in Kenya went up to 5.58 percent in November of 2018 from 5.53 in the previous month, mainly due to higher prices of food and non-alcoholic beverages and transport. On a monthly basis, consumer prices went down 0.18 percent, following a 0.79 percent drop in October.

Year-on-year, prices advanced faster for food and non-alcoholic beverages (1.72 percent from 0.52 percent in October); transport (15.57 percent from 15.3 percent); communication (4.74 percent from 4.3 percent); education (4.94 percent from 4.8 percent) and alcoholic beverages and tobacco (7.2 percent from 7.05 percent). 

On the other hand, cost slowed for housing and utilities (13.69 percent from 17.12 percent); clothing and footwear (4.15 percent from 4.73 percent); furniture and household equipment (4.37 percent from 4.68 percent); restaurant and hotels (4.2 percent from 4.32 percent); miscellaneous goods and services (4.18 percent from 4.44 percent); health (4.81 percent from 5.92 percent) and recreation and culture (1.51 percent from 1.67 percent).

On a monthly basis, consumer prices decreased 0.18 percent, following a 0.79 percent fall in October. Prices of food and non-alcoholic beverages went down 0.15 percent, compared to a 1.76 percent decline in the prior month, mainly due to lower prices of maize and maize products. Additionally, cost of transport rebounded (0.81 percent from -0.86 percent), due to cost of petrol (0.91 percent from -0.9 percent). 




Tuesday November 27 2018
Kenya Interest Rate Steady at 9%
Central Bank of Kenya | Stefanie Moya | stefanie.moya@tradingeconomics.com

The Central Bank of Kenya left its benchmark interest rate unchanged at 9.0 percent at its November 27th 2018 meeting, as widely expected. Policymakers said that the decision is appropriate and based on the backdrop of macroeconomic stability, economic growth prospects and uncertainties in the global financial markets. Policymakers noted that inflation expectations remained well anchored within the target range and that the economy was operating close to its potential. The Committee also said that they continue to monitor global and domestic economic developments and if necessary take additional measures.

Excerpts from the MPC Press Release:

Month-on-month overall inflation remained within the target range in September and October, largely due to lower food prices and muted demand-driven inflationary pressures. The inflation rate fell to 5.5 percent in October from 5.7 percent in September, following decreases in food prices which offset the increase in energy prices and transport costs following the implementation of VAT on petroleum products in September 2018. Non-food-non-fuel (NFNF) inflation remained below 5 percent, indicating that there were no demand pressures in the economy. Looking forward, overall inflation is expected to remain within the target range in the near term, mainly due to expected lower food prices reflecting favorable weather conditions, the decline in international oil prices, and the recent downward revision in electricity tariffs. The recent excise tax adjustment on voice calls and internet services is expected to have a marginal impact on inflation.

Data for the second quarter of 2018 showed a strong pickup of the economy, with real GDP growth averaging 6.0 percent in the first half of 2018 compared to 4.7 percent in the first half of 2017. This outcome was due to a strong recovery in agricultural activity due to improved weather conditions, continued recovery of the manufacturing sector, and resilient performance of the services sector particularly trade, tourism, information and communication, transport, and real estate. Overall growth in 2018 is expected to be strong, supported by recovery in agricultural production, alignment of Government spending to the Big 4 priority sectors, a stable macroeconomic environment, an improved business environment, and a favorable external environment.

The MPC Private Sector Market Perception Survey conducted in November indicated that inflation expectations were well anchored within the target range in the near term on account of lower food prices and reduction in electricity prices. The Survey revealed increased optimism for stronger overall growth in 2018. Respondents attributed this optimism to, among other factors, improved agricultural production, continued infrastructure development, an improvement in the business environment, focus by the Government on the Big 4 priority sectors, a stable macroeconomic environment and the expected increase in trade and tourist arrivals following the commencement of direct flights to the United States. However, the optimism was tempered by sluggish private sector credit growth, concerns over delayed government spending, and the recent increase in fuel prices.

The Committee noted that inflation expectations remained well anchored within the target range, and that the economy was operating close to its potential. The MPC concluded that the current policy stance remains appropriate, and will continue to monitor any perverse response to its previous decisions. The Committee therefore decided to retain the CBR at 9.00 percent. The MPC will continue to closely monitor developments in the global and domestic economy and stands ready to take additional measures as necessary.




Wednesday October 31 2018
Kenya Annual Inflation Rate Slows to 5.53% in October
Kenya National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

The annual inflation rate in Kenya fell to 5.53 percent in October of 2018 from 5.7 percent in September. Prices eased mainly due to slowdown in cost housing and utilities and transport, amid a petroleum products tax cut to 8 percent from an initial 16 percent at the beginning of September. On a monthly basis, consumer prices dropped 0.79 percent after rising 1.02 percent in the previous month.

Year-on-year, prices slowed for housing & utilities (17.12 percent compared to 17.44 percent in September); transport (15.30 percent compared to 17.29 percent); ); furnishings and household equipment (4.68 percent compared to 4.86 percent); restaurants & hotels (4.32 percent compared to 5.04 percent) and education (4.80 percent compared to 5.04 percent). 

Meanwhile, cost rose further for clothing & footwear (4.73 percent compared to 4.58 percent); miscellanous goods & services (4.44 percent compared to 4.30 percent); communication (4.30 percent compared to 0.61 percent); health (5.92 percent compared to 5.90 percent);  recreation & culture (1.67 percent compared to 1.61 percent) and alcoholic beverages & tobacco (7.05 percent compared to 6.48 percent). Also, inflation was steady for food and non-alcoholic beverages (at 0.5 percent, the same as in September).

On a monthly basis, consumer prices declined by 0.79 percent, after increasing 1.02 percent in the prior month. Cost of food & non-alcoholic beverages dropped (-1.76 percent compared to 0.37 percent) mostly due to lower prices of maize and maize products. Additionally, prices of transport decreased (-0.86 percent compared to 7.99 percent), due to cost of petrol (-0.9 percent compared to 2.6 percent) and diesel (1.5 percent compared to 5.1 percent). Also, prices of housing & utilities eased (0.20 percent compared to 0.47 percent).


Monday October 01 2018
Kenya Annual Inflation Rate at 11-Month High in September
Kenya National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

The annual inflation rate in Kenya increased to 5.7 percent year-on-year in September of 2018 from 4.0 percent in the previous month and above market expectations of 4.95 percent. It was the highest inflation rate since October last year, mainly due to higher cost of transport and food & non-alcoholic beverages. In September, at the beginning of the month a 16 percent tax on petroleum products was introduced, due to the impacts it had the Parliament approved President Uhuru Kenyatta proposal of cut the VAT to 8 percent.

Year-on-year, cost of food and non-alcoholic beverages increased by 0.5 percent, after dropping 1.15 percent in August. Additionally, prices advanced faster for transport (17.29 percent compared to 9.37 percent); housing & utilities (17.44 percent compared to 16.70 percent); clothing & footwear (4.58 percent compared to 4.17 percent); furnishings and household equipment (4.86 percent compared to 4.63 percent); miscellanous goods & services (4.30 percent compared to 4.20 percent); restaurants & hotels (5.04 percent compared to 5.0 percent); health (5.90 percent compared to 5.69 percent);  recreation & culture (1.61 percent compared to 1.55 percent) and alcoholic beverages & tobacco (6.48 percent compared to 5.80 percent). 

On the other hand, prices slowed for communications (0.61 percent compared to 0.62 percent) and  education (5.04 percent compared to 5.11 percent). 

On a monthly basis, consumer prices advanced by 1.02 percent, following a 0.31 percent gain in August. Cost of food & non-alcoholic beverages rebounded (0.37 percent compared to -0.66 percent) boosted by higher prices of some foodstuffs. Also, prices of transport jumped (7.99 percent compared to 0.87 percent), driven by higher cost of petrol (2.6 percent compared to 1.3 percent) and diesel (5.1 percent compared to -0.5 percent). In contrast, prices eased for housing & utilities (0.47 percent compared to 2.56 percent).


Tuesday September 25 2018
Kenya Leaves Interest Rate Unchanged at 9%
Central Bank of Kenya | Stefanie Moya | stefanie.moya@tradingeconomics.com

The Central Bank of Kenya held its benchmark interest rate steady at 9.0 percent at its September 25th 2018 meeting, as widely expected and after trimming it by 50 bps in the previous meeting. Policymakers noted inflation expectations remained well anchored within the target range, still they will continue to monitor closely the inflationary effects from the VAT on petroleum products.

Excerpts from the MPC Press Release:

Month-on-month overall inflation remained within the target range in July and August 2018, largely due to lower food prices. The inflation rate fell to 4.0 percent in August from 4.4 percent in July, following decreases in food prices which offset the increase in energy prices, including the increase in the price of charcoal. Nonfood-non-fuel (NFNF) inflation remained below 5 percent, indicating that demand-driven inflationary pressures remain muted. Overall inflation is expected to rise in the near term, following the implementation of VAT on petroleum products in September 2018 and its impact on other prices, as well as increases in international oil prices. However, it is expected to remain within the target range due to lower food prices reflecting favorable weather.

The MPC Private Sector Market Perception Survey conducted in September 2018 showed that inflation expectations were well anchored within the target range in the near term on account of lower food prices. However, respondents expected inflation to rise slightly due to higher energy prices attributed to the impact of the VAT on petroleum products and increases in international oil prices. The Survey indicated sustained optimism for stronger growth in 2018 and an improved business environment. Respondents attributed this optimism to, among others, a rebound in agriculture, pick-up in private sector economic activity, focus by the Government on the Big 4 priority sectors, strong forward hotel bookings, renewed business confidence due to the ongoing war against corruption, and a stable macroeconomic environment. The optimism was tempered by the expected impact of the VAT on petroleum products on the cost of doing business.

The Committee noted that inflation expectations remained well anchored within the target range, but concluded that there was need to monitor the second-round inflationary effects arising from the VAT on petroleum products, and any perverse response to its previous decisions. The Committee therefore decided to retain the CBR at 9.00 percent. The MPC will continue to closely monitor developments in the global and domestic economy, and stands ready to take additional measures as necessary.


Friday August 31 2018
Kenya Inflation Rate Slows to 5-Month Low in August
Stefanie Moya | stefanie.moya@tradingeconomics.com

The annual inflation rate in Kenya decreased to 4.04 percent in August of 2018 from 4.35 percent in the previous month and above market expectations of a 4.35 percent gain. It was the lowest inflation rate since March, mainly due to a fall in prices of food and non-alcoholic beverages.

Year-on-year, cost of  food and non-alcoholic beverages declined by 1.15 percent, after rising 0.53 percent in July. Also, prices eased for furnishings and household equipment (4.63 percent compared to 4.66 percent); health (5.69 percent compared to 6.18 percent) and communications (0.62 percent compared to 0.82 percent). In contrast, prices advanced faster for housing & utilities (16.70 percent compared to 14.40 percent); transport (9.37 percent compared to 8.45 percent); clothing & footwear (4.17 percent compared to 4.10 percent); miscellanous goods & services (4.20 percent compared to 4.01 percent); restaurants & hotels (5.0 percent compared to 4.75 percent); recreation & culture (1.55 percent compared to 1.45 percent) and alcoholic beverages & tobacco (5.80 percent compared to 2.86 percent). Additionally, inflation was steady for education (5.11 percent, the same as in July).

On a monthly basis, consumer prices went up 0.31 percent, following a 0.89 percent decrease in July. Cost of food & non-alcoholic beverages dropped at a softer pace (-0.66 percent compared to -2.40 percent). In addition, prices rose faster for housing & utilities (2.56 percent compared to 0.12 percent), due to higher cost of electricity (6.6 percent) and transport (0.87 percent compared to 0.62 percent), driven by an increase in the pump price of petrol (1.3 percent).


Wednesday August 01 2018
Kenya Inflation Rate Rises to 4.35% YoY in July
Kenya National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

The annual inflation rate in Kenya rose to 4.35 percent in July of 2018 from a 4.28 percent June, reaching its highest level since February. Prices increased faster mostly due to housing and utilities and transport. On a monthly basis, consumer prices fell 0.89 percent in July, unchanged from the previous month.

Year-on-year, cost advanced further for housing & utilities (14.40 percent compared to 14.17 percent in June); transport (8.45 percent compared to 7.47 percent); furnishings and household equipment (4.66 percent compared to 4.64 percent); health (6.18 percent compared to 4.22 percent) and alcoholic beverages & tobacco (2.86 percent compared to 2.77 percent). On the other hand, cost slowed for food and non-alcoholic beverages (0.53 percent compared to 0.90 percent); clothing & footwear (4.10 percent compared to 4.17 percent); restaurants & hotels (4.75 percent compared to 4.77 percent); miscellanous goods & services (4.01 percent compared to 4.12 percent); communications (0.82 percent compared to 0.85 percent) and recreation & culture (1.45 percent compared to 1.52 percent). Also, inflation was steady for education (5.11 percent, the same as in June).

On a monthly basis, consumer prices declined 0.89 percent, the same as in the previous month. Prices decreased for food & non-alcoholic beverages (-2.40 percent compared to -2.20 percent), driven by a drop in prices of some foodstuffs, mainly tomatoes  (-21.67 percent), maize grain loose (-3.04 percent) and beans (-1.74 percent). Additionally, cost eased for housing & utilities (0.12 percent compared to 0.52 percent). In contrast, cost of transport went up at a faster pace (0.62 percent compared to 0.37 percent), boosted by an increase in the pump price of petrol (3.10 percent).


Monday July 30 2018
Kenya Trims Interest Rate by 50 Bps to 9.0%
Central Bank of Kenya | Stefanie Moya | stefanie.moya@tradingeconomics.com

The Central Bank of Kenya lowered its benchmark interest rate by 50 bps to 9.0 percent at its June 30th 2018 meeting, surprising markets who expected no changes. It is the second cut so far this year, bringing borrowing cost to the lowest since 2015. The Committee noted that there was some room for further accommodative monetary policy as inflation expectations were well anchored within the target range and economic output was below its potential level.

Excerpts from the MPC Press Release:

Month-on-month overall inflation remained within the target range in May and June 2018 largely due to lower food prices. The inflation rate was 4.3 percent in June compared to 4.0 percent in May 2018, mainly reflecting increases in energy prices. Non-food-non-fuel (NFNF) inflation remained below 5 percent, indicating that demand-driven inflationary pressures are muted. Higher domestic fuel prices due to the recent increase in international oil prices, and the impact of the excise tax indexation on prices of some of the CPI items are expected to exert moderate upward pressure on inflation in the near term. Nevertheless, overall inflation is expected to remain within the target range mainly due to expectations of lower food prices reflecting favorable weather conditions. 

Data for the first quarter of 2018 showed a strong pickup of the economy, with real GDP growth of 5.7 percent compared to 4.8 percent in the first quarter of 2017. This outcome was driven by a strong recovery in agricultural activity due to improved weather conditions, a recovery of the manufacturing sector, and resilient performance of the services sector particularly wholesale and retail trade, real estate, and tourism. Growth in 2018 is expected to be strong, supported by continued recovery in agriculture, a resilient services sector, alignment of Government spending to the Big 4 priority sectors, and the stable macroeconomic environment.

The MPC Private Sector Market Perception Survey conducted in July 2018 indicated that inflation expectations were well anchored in the near term on account of lower food prices, but was expected to rise slightly due to higher energy prices and the impact of recent tax measures. The Survey indicated sustained optimism for stronger growth in 2018 and an improved business environment. Respondents attributed this optimism to, among others, a rebound in agriculture, completion of key infrastructure projects, focus by the Government on the Big 4 priority sectors, strong forward hotel bookings, renewed business confidence, and a stable macroeconomic environment.

The MPC noted that inflation expectations were well anchored within the target range, and that economic growth prospects were improving. Furthermore, economic output was below its potential level, and there was some room for further accommodative monetary policy. Consequently, while noting the risk of perverse outcomes, the Committee decided to lower the Central Bank Rate (CBR) to 9.00 percent from 9.50 percent. The MPC will closely monitor the impact of this change in its policy stance. Other developments in the domestic and global economy will also be observed, and the MPC stands ready to take additional measures as necessary.


Friday June 29 2018
Kenya Inflation Rate Rises to 4-Month High in June
Kenya National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

The annual inflation rate in Kenya increased to 4.28 percent in June of 2018 from 3.95 percent in May, below market expectations of 5.3 percent. It was the highest inflation rate since February, mainly due to higher prices of food and non-alcoholic beverages and housing and utilities. On a monthly basis, consumer prices fell 0.89 percent, after a 0.97 percent gain in the previous month.

Compared to May of 2017, cost went up further for food and non-alcoholic beverages (0.90 percent compared to 0.34 percent in May); housing & utilities (14.17 percent compared to 13.73 percent); transport (7.47 percent compared to 7.01 percent) and furnishings and household equipment (4.64 percent compared to 4.51 percent). Additionally, prices rose faster for communications (0.85 percent compared to 0.82 percent); education (5.11 percent compared to 5.07 percent); health (4.22 percent compared to 3.98 percent) and alcoholic beverages & tobacco (2.77 percent compared to 2.25 percent). In contrast, cost eased for clothing & footwear (4.17 percent compared to 4.27 percent); restaurants & hotels (4.77 percent compared to 4.92 percent); miscellanous goods & services (4.12 percent compared to 4.19 percent) and recreation & culture (1.52 percent compared to 1.53 percent). 

On a monthly basis, consumer prices dropped 0.89 percent, after a 0.97 percent increase May. Cost declined for food & non-alcoholic beverages (-2.2 percent compared to 1.35 percent), mostly due to a fall in prices of some foodstuffs outweighed, namely gren maize (-25.85 percent), onions (-18.20 percent) and potatoes (-15.08 percent). Also, prices slowed for housing & utilities (0.52 percent compared to 1.79 percent), driven by electricity charges (-4.99 percent). Meanwhile, cost of transport advanced at a faster pace (0.37 percent compared to 0.10 percent), boosted by higher prices of petrol and diesel.


Thursday May 31 2018
Kenya Inflation Rate Edges Up to 3.95% in May
Kenya National Bureau of Statistics | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The inflation rate in Kenya increased to 3.95 percent year-on-year in May 2018, quickening from 3.73 percent in April. Prices rose faster mainly for food and housing & utilities while were stable for transport.

Compared to May of 2017, inflation rate picked up primarily for food and non-alcoholic beverages (0.34 percent vs 0.26 percent in April) and housing & utilities (13.73 percent vs 11.80 percent). In addition, prices continued to advance clothing & footwear (4.27 percent vs 4.09 percent); health (3.98 percent vs 3.48 percent); communications (0.82 percent vs 0.79 percent) and recreation & culture (1.53 percent vs 1.40 percent). 

Meanwhile, cost was stable for transport (7.01 percent) while slowed for furnishings (4.51 percent vs 4.61 percent); restaurants & hotels (4.92 percent vs 6.04 percent); miscellanous goods & services (4.19 percent vs 4.74 percent); education (5.07 percent vs 5.09 percent) and alcoholic beverages & tobacco (2.25 percent vs 2.79 percent).

On a monthly basis, consumer prices rose 0.97 percent, easing from a 1.35 percent increase in April. Cost went up less for food & non-alcoholic beverages (1.35 percent vs 1.59 percent), as prices of some foodstuffs outweighed decreases recorded in others. In particular, the biggest increases in prices were seen for tomatoes (15.47 percent to KES 120.4 per kilo) and spinach (5.5 percent to KES 69.12 per kilo) while the main decline was recorded for maize flour (-4.38 percent to KES 59.99 per kilo). Also, prices advanced less for housing & utilities (1.79 percent vs 3.24 percent), despite the increase in prices of cooking fuels, namely charcoal which recorded the highest rise of 9.66 per cent. Meantime, cost rose 0.10 percent for transport (0.16 percent in April), amid increases in the pump price of petrol which offset a decrease in diesel prices.