Kenya’s annual inflation rate dropped significantly in September to 3.6 percent, levels last seen in November 2012, falling below the Central Bank of Kenya’s midpoint target of 5%.
- •Compared to September 2023, Kenya’s consumer prices edged up 3.6% in September – lower than the 4.4% recorded in August 2024.
- •The slowdown in consumer prices is attributed to softer increases in food and energy prices over the period according to the Statistics body on Wednesday.
- •Monthly inflation saw a 0.2% increase as indicated by the Consumer Price Index (CPI) which jolted higher to 140.13 in September from 139.87 in August.
In the period between September 2023 and September 2024, Food and Non-alcoholic beverages prices increased 5.1 percent, driven by rise in prices of Irish Potatoes, Beef, Cabbage, Onions and Oranges. The increases were watered down by decreases in prices of Sugar, maize grain and wheat flour.
The increase in prices of country bus fare prompted the 0.1 percent increase in the Transport Index between August 2024 and September 2024 with petrol and diesel prices stagnating. Similarly, alcoholic beverages, tobacco and narcotics prices saw a 7.7% year-on-year increase.
Commodities under housing, water and electricity saw prices increase by 2.2% between September 2023 and September 2024.
The stronger shilling has helped lower the cost of imports during the period, with Kenya’s major imports including oil and machinery.
“The low and stable exchange rate has provided support in easing the inflationary pressures that have been witnessed in the past one year,” KNBS noted in the monthly report.
With the CBK’s Monetary Policy Committee convening on 8th October, the latest inflation data is likely to influence their decision with Kenyans eyeing further cuts. The CBK began its easing cycle in August after a “higher for longer” stance dating back to the post pandemic period spilling over to 2024, in a bid to anchor inflationary pressures while stabilizing the domestic currency.
In their last meeting, the MPC noted they expect inflation to remain mild, anchored within their midpoint target amid the gaining shilling.