Thursday February 01 2018
Kenya Inflation Rate Rises at a Faster Pace
Kenya National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

Consumer prices in Kenya rose 4.8 percent year-on-year in January of 2018, after a 4.5 percent gain in the previous month. Prices advanced at a faster pace after easing for five consecutive months, mostly due to food and housing and utilities.

Compared to January of 2017, cost increased at a faster pace for food and non-alcoholic beverages (4.71 percent compared to 4.68 percent in January); housing and utilities (5.74 percent compared to 5.13 percent); transport (6.80 percent compared to 5.82 percent); clothing and footwear (3.61 percent compared to 2.97 percent); furnishings and household equipment (3.62 percent compared to 3.26 percent); miscellaneous goods and services (4.11 percent compared to 3.56 percent); restaurant and hotels (7.03 percent compared to 6.61 percent); communication (0.59 percent compared to 0.53 percent) and education (5.38 percent compared to 3.21 percent).

On a monthly basis, consumer prices rose 1.32 percent, following a 0.54 percent increase in the previous month. Prices went up faster for food and non-alcoholic beverages (1.69 percent compared to 0.25 percent in December), namely some foodstuffs. In addition, cost advanced further for housing and utilities (0.90 percent compared to 0.27 percent), mainly due to higher prices of house of rents, kerosene and charcoal. In contrast, cost of transport slowed to 1.53 percent from a 2.44 percent, due to prices of diesel and petrol.




Monday January 22 2018
Kenya Keeps Interest Rate Steady at 10%
Central Bank of Kenya | Stefanie Moya | stefanie.moya@tradingeconomics.com

The central bank of Kenya kept its benchmark interest rate unchanged at 10 percent for the eighth consecutive meeting on January 22nd 2018, as widely expected. The Committee said the decision aims to anchor inflation expectations in the context of sustained macroeconomic stability, increased optimism on growth prospects, improving business environment, and continued strengthening of the global economy.

Excerpts from the MPC Press Release:

Month-on-month overall inflation fell to 4.5 percent in December 2017 from 4.7 percent in November 2017, thereby remaining within the Government target range. This decline was due to lower food prices reflecting improved supply of key food items, particularly cabbages, Irish potatoes, tomatoes, sugar, and maize flour. The decrease in food prices outweighed the increase in fuel and electricity prices, and the rise in transport costs during the festive period. Non-food-non-fuel (NFNF) inflation remained below 5 percent demonstrating that demand driven inflationary pressures remained muted. Although the rise in international oil prices is expected to exert moderate upward pressure, overall inflation is expected to remain well anchored and within the Government target range in the near term.

The MPC Private Sector Market Perception Survey conducted in January 2018 showed an upsurge in optimism by the private sector for the economic prospects in 2018. More than 90 percent of the respondents were optimistic about prospects for 2018, compared to 65 percent in November 2017. These respondents attributed their optimism to a stable macroeconomic environment, improved business environment and investor confidence, continued public investment in infrastructure, and expected commencement of direct flights to the U.S.

The MPC noted increased optimism for growth prospects in the economy and that inflation expectations are well anchored within the Government target range. The Committee noted that there was some room for accommodative monetary policy in the near term, as well as the risk of perverse outcomes. It concluded that there was need to further monitor and assess the impact of its policy actions. The MPC therefore decided to retain the Central Bank Rate (CBR) at 10.0 percent. The Committee continues to monitor the impact of the interest rate caps on the effective transmission of monetary policy. The CBK will continue to closely monitor developments in the global and domestic economy, and stands ready to take additional measures as necessary.




Friday December 29 2017
Kenya Inflation Rate Slows to 4.5% in December
Kenya National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

Consumer prices in Kenya increased 4.5 percent year-on-year in December of 2017, easing from a 4.7 percent rise in the previous month. It was the lowest inflation rate since May 2013, as prices went up softer mainly for food and housing and utilities.

Compared to December of 2016, prices advanced at a softer pace for food and non-alcoholic beverages (4.68 percent compared to 5.79 percent in November); housing and utilities (5.13 percent compared to 5.27); furnishings and household equipment (3.26 percent compared to 3.02 percent) and  miscellaneous goods and services (3.56 percent compared to 3.61 percent). In contrast, cost rose faster for transport (5.82 percent compared to 3.81 percent); clothing and footwear (2.97 percent compared to 2.91 percent); restaurant and hotels (6.61 percent compared to 5.89 percent), communication (0.53 percent compared to 0.45 percent) and education (3.21 percent compared to 3.14 percent).

On a monthly basis, consumer prices went up 0.54 percent, after a 0.23 percent fall in the previous month. Prices rebounded for food and non-alcoholic beverages (0.25 percent compared to -1.33 percent), namely some foodstuffs. In addition, cost rose faster for transport (2.44 percent compared to 0.58 percent), mostly due to increases in prices of diesel and petrol and higher bus fares linked with December festivities. On the other hand, prices for housing utilities rose softer (0.27 percent compared to 1.74 percent), mostly due to higher prices of charcoal and kerosene. 


Friday December 01 2017
Kenya Inflation Rate Eases to 4.73%
Kenya National Bureau of Statistics | Marta Dubiel | marta.dubiel@tradingeconomics.com

Consumer prices in Kenya increased 4.73 percent year-on-year in November of 2017, easing from a 5.72 percent rise in the previous month and below market expectations of 5.5 percent gain. It was the lowest inflation rate since May 2013 amid a slowdown in food cost, mostly due to more favorable weather conditions. Higher prices were recorded for housing utilities, due to rising house rents, electricity and other cooking fuels.

Compared to November of 2016, prices rose at a softer pace for food and non-alcoholic beverages (5.79 percent from 8.47 percent); furnishings and household equipment (3.02 percent from 3.19 percent) and restaurant and hotels (5.89 percent from 5.96 percent). Also, cost of clothing and footwear slowed marginally to 2.91 percent compared to 2.92 percent. Prices rose at the same pace as in the previous month for education (3.14 percent). On the contrary, inflation went up for housing and utilities (5.27 from 3.58); transport (3.81 percent from 3.78 percent); miscellaneous goods and services (3.61 percent from 3.29 percent) and communication (0.45 percent from 0.40 percent).

On a monthly basis, consumer prices decreased 0.23 percent, less than a 0.63 percent fall in the previous month. Cost declined slower for food and non-alcoholic beverages (-1.33 percent from -1.78 percent), namely carrots, cabbages, tomatoes and spinach. Cost of transport slowed to 0.58 percent, compared to 0.86 percent, although prices of diesel increased to 4.12 percent from 2.22 percent. In contrast, cost of housing utilities increased to 1.74 percent from 0.47 percent, mostly due to higher prices of electricity (4.96 percent from 4.06 percent). 


Thursday November 23 2017
Kenya Leaves Monetary Policy Unchanged
Central Bank of Kenya | Stefanie Moya | stefanie.moya@tradingeconomics.com

The central bank of Kenya kept its benchmark interest rate unchanged at 10 percent for the seventh consecutive meeting on November 23rd 2017, as widely expected. Policymakers said the decision aims to continue to anchor inflation expectations in the context of favourable weather conditions, sustained macroeconomic stability, the conclusion of a prolonged election period, and an improvement in the global economy outlook.

Month-on-month overall inflation fell to 5.7 percent in October 2017 from 7.1 percent in September 2017, thereby remaining within the Government target range. This decline was largely due to lower food prices, particularly for cabbages and Irish potatoes. The decrease in food prices offset the increases in fuel and electricity prices in October. Non-food-non-fuel (NFNF) inflation remained below 5 percent, demonstrating that demand pressures are muted. Despite an increase in international oil prices which has exerted upward pressure on fuel prices, improved weather conditions and the extension of the maize subsidy are expected to continue supporting a further lowering in food prices and a decline in overall inflation in the near term.

The Committee noted that despite the effects of the drought experienced in the first half of 2017, and the prolonged elections in the second half of the year, economic growth has remained resilient. Growth has principally been supported by the services sector particularly the Micro, Small and Medium Enterprises (MSMEs). The economy is expected to grow by 5.1 percent in 2017, and to pick up strongly in the medium term supported by a stable macroeconomic environment.

The MPC Private Sector Market Perception Survey conducted in November 2017 showed that inflation was well anchored and is expected to decline in the short term. Respondents expected the exchange rate to remain stable supported by strong diaspora remittances and sufficient CBK foreign exchange reserves. The Survey also showed optimism in the economic prospects, with the conclusion of the elections, improved weather conditions, and continued public investment in infrastructure.

The Committee concluded that inflationary pressures in the economy were muted, and inflation was expected to continue to decline in the short term. The MPC therefore decided to retain the Central Bank Rate (CBR) at 10.0 percent. The MPC continues to monitor the impact of the interest rate caps on the effective transmission of monetary policy. The CBK will continue to closely monitor developments in the global and domestic economy, and stands ready to take additional measures as necessary.


Tuesday October 31 2017
Kenya Inflation Rate Slows to 5.72% in October
Kenya National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

Consumer prices in Kenya increased 5.72 percent year-on-year in October of 2017, easing from a 7.06 percent rise in the previous month and below market expectations of 6.73 percent. It is the lowest inflation rate since May of 2016 amid a slowdown in food cost, mainly due to better weather conditions. On the other hand, higher electricity cost and a rise in pump prices of petrol and diesel pushed transport cost up.

Compared to October of 2016, prices rose less for food and non-alcoholic beverages (8.47 percent compared to 11.50 percent in September); clothing and footwear (2.92 percent compared to 3.47 percent) and miscellaneous goods and services (3.29 percent compared to 3.34 percent). On the other hand, cost increased more for housing and utilities (3.58 percent compared to 3.27 percent); furnishings and household equipment (3.19 percent compared to 2.95 percent); transport (3.78 percent compared to 3.29 percent); restaurant and hotels (5.96 percent compared to 5.16 percent); communication (0.40 percent compared to 0.36 percent) and education (3.14 percent compared to 3.04 percent). 

On a monthly basis, consumer prices decreased 0.63 percent, following a 0.57 percent fall in the previous month. Cost declined faster for food and non-alcoholic beverages (-1.78 percent compared to -1.28 percent in September), namely carrots, cabbages, oranges, onions and wheat. In contrast, cost of housing and utilities rebounded (0.47 percent compared to -0.16 percent), due to electricity (4.06 percent compared to -7.07 percent) and cost rose faster for transport (0.86 percent compared to 0.70 percent), as a result of an increase in prices of diesel (2.22 percent compared to 1.15 percent) and petrol (3.63 percent compared to 2.29 percent).


Friday September 29 2017
Kenya Inflation Rate Slows to 7.06% in September
Kenya National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

Consumer prices in Kenya increased 7.06 percent year-on-year in September of 2017, following an 8.04 percent rise in the previous month. It is the lowest inflation rate since January amid a slowdown in food and electricity cost. On the other hand, higher pump prices of petrol and diesel pushed transport cost up.

Compared to September of 2016, prices rose less for food and non-alcoholic beverages (11.5 percent compared to 13.6 percent in August); housing and utilities (3.3 percent compared to 3.5 percent); clothing and footwear (3.5 percent compared to 3.8 percent) and furnishings and household equipment (2.95 percent compared to 3.2 percent). On the other hand, cost increased more for transport (3.3 percent compared to 2.3 percent in August); communication (0.4 percent compared to 0.3 percent) and education (3 percent compared to 2.8 percent). 

On a monthly basis, consumer prices fell 0.6 percent following a 0.6 percent rise in the previous month. Cost declined for food and non-alcoholic beverages (-1.3 percent compared to 1 percent in August), namely carrots, cabbages, potatoes, wheat, sugar and kale. Also, cost of housing and utilities decreased 0.2 percent compared to a 0.5 percent rise in August, due to electricity (-7.1 percent compared to 8.3 percent). On the other hand, cost of transport rose faster (0.7 percent compared to 0.03 percent), as a result of an increase in prices of diesel (1.2 percent compared to 1.6 percent) and petrol (2.3 percent compared to -1 percent).


Monday September 18 2017
Kenya Maintains Key Rate at 10%
Central Bank of Kenya |Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The central bank of Kenya kept its benchmark interest rate unchanged at 10 percent for the thirteenth consecutive meeting on September 18th, 2017, as widely expected. Policymakers said the decision aims to continue to anchor inflation expectations in the context of general macroeconomic stability, a prolonged election period and continuous uncertainties in the global economy.

Excerpts from the MPC Press Release:

The Monetary Policy Committee (MPC) met on September 18, 2017, to review the outcome of its policy decisions and recent economic developments. The meeting was held against a backdrop of general macroeconomic stability, a prolonged election period, and continued uncertainties in the global economy.

Month-on-month overall inflation rose to 8.0 percent in August 2017 from 7.5 percent in July 2017 reflecting limited supply of some food items, particularly tomatoes, following transport difficulties in the immediate period after the general elections. Additionally, unusual demand for some food items such as wheat flour and rice in the period before the elections resulted in a temporary shortage. Nevertheless, the contribution to overall inflation of some items such as maize grain, maize flour, milk,sugar, and Irish potatoes decreased in part due to favorable weather conditions and the positive impact of Government measures. Non-food-non-fuel (NFNF) inflation remained stable below 5 percent suggesting that demand pressures in the economy were muted. A normalization of supply, the expected short rains, and supportive measures taken by the Government are expected to further lower food prices in the near term.

The Committee reviewed the recent economic developments and noted that growth expectations remain unchanged. The stable macroeconomic environment is expected to be supported by a recovery in agriculture due to normal weather conditions, a resilient services sector, continued infrastructure development, and stability in the global economy. Spending by the National and County Governments in the near term is expected to provide an additional stimulus.

The MPC Private Sector Market Perception Survey conducted in September 2017 showed that inflation was expected to decline due to lower food prices with the expected short rains and the Government subsidies on some food items. Growth expectations by banks and non-banks remained unchanged in the September 2017 survey relative to the July 2017 survey, with banks expecting a lower growth on account of weaker private sector credit growth and concerns over the continuing election process. However, nonbank private firms expect the continued public investment in infrastructure, and favourable weather conditions during the short rains season to support growth in 2017.

Although the outlook for global growth has improved, uncertainties remain particularly with regard to U.S. economic policies, the post-Brexit resolution, and the pace of normalization of monetary policies in advanced economies.

The Committee concluded that the current policy stance remains appropriate. The MPC therefore decided to retain the Central Bank Rate (CBR) at 10.0 percent in order to continue to anchor inflation expectations. The CBK will continue to closely monitor developments in the global and domestic economy, and stands ready to take additional measures as necessary.


Thursday August 31 2017
Kenya Inflation Rate Accelerates to 8.04% in August
Kenya National Bureau of Statistics |Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Consumer prices in Kenya increased 8.04 percent year-on-year in August of 2017, above 7.47 percent in July and market expectations of 7.6 percent. The rise in annual inflation is mainly attributed to higher prices of food, as a consequence of reduced supply especially in the second week of the month. The country is struggling with hunger after being hit hard by two years of drought.

Compared to August of 2016, prices continued to rise for food and non-alcoholic beverages (13.57 percent vs 12.19 percent in July) and housing and utilities (3.49 percent vs 3.03 percent). Additional upward pressure came from: transport (2.26 percent vs 2.77 percent); clothing and footwear (3.80 percent vs 4.07 percent) and furniture and household equipment (3.23 perecent vs 3.40 percent).

On a monthly basis, consumer prices went up 0.61 percent following a 0.96 drop in the previous month. Cost recovered for food and non-alcoholic beverages (1.04 percent vs -2.05 percent in the previous month), namely tomatoes, spinach, carrots, wheat flour, rice grade one and potatoes. In addition, prices recovered for housing and utilities (0.54 percent vs -0.08 percent), due to a marginal increase in prices of electricity and kerosene. Also, cost of transport rose marginally 0.03 percent, after dropping 0.29 percent in July, affected by higher prices of diesel, despite the fall in petrol cost.


Monday July 31 2017
Kenya Inflation Rate Down to 6-Month Low of 7.47%
Kenya National Bureau of Statistics | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Kenya increased 7.47 percent year-on-year in July of 2017, below 9.21 percent in June and market expectations of 9 percent. It is the lowest inflation rate since January due to a slowdown in food prices. Yet, the inflation slowed for second month in July after hitting a 5-year high of 11.7 percent in May as a severe drought last year destroyed agricultural crops, causing a surge in food inflation.

Year-on-year, prices rose less mainly for food and non-alcoholic beverages (12.19 percent compared to 15.81 percent in June) and transport (2.77 percent compared to 4.23 percent). On the other hand, inflation increased for housing and utilities (3.03 percent compared to 2.96 percent) and clothing and footwear (4.07 percent compared to 3.99 percent) and was steady for furniture and household equipment (3.40 percent).

On a monthly basis, consumer prices dropped 0.96 percent, mainly due to a 2.05 percent fall in cost of food and non-alcoholic drinks.