The inflation rate has risen for the fifth consecutive month from a low of 2.7% in October last year to 3.6% in March, according to figures from the Kenya National Bureau of Statistics (KNBS).
- •Inflation rose from 3.5% in February to 3.6% last month, driven by an increase in prices of food and non-alcoholic beverages.
- •The housing, water, electricity, gas and other fuel index rose by 0.2% with the statistics office attributing the rise to prices of 50kWh electricity and 200kWh electricity which went up by 1.0% and 0.9% respectively.
- •Separately, a CBK survey revealed that there is improved optimism about business activity and economic growth prospects for the next 12 months.
“Notably, prices of sukuma wiki, potatoes, and maize rose by 6.2, 4.5 and 3.3 per cent respectively between February and March. During the same period, prices of sugar and beans dropped by 0.7% and 0.2% respectively,” says McDonald Obudho, Director General, KNBS.
“The transport Index rose by 1.5% mainly due to increase in prices for local flights by 3.9%. Prices for petrol and Diesel remained the same between February and March. The prices for restaurant and accommodation services index increased by 0.4% on account of a rise in prices of hotel and restaurant prepared foods,” he added.
The Central Bank’s CEOs Survey and Market Perceptions Survey, conducted before its last MPC meeting in February, attribute the renewed optimism to the stable macroeconomic environment reflected in low inflation and stability in the exchange rate, expected decline in interest rates which is expected to ease access to credit, favourable weather conditions which will continue to support agriculture, and lower global oil prices. Respondents expressed concerns about subdued consumer demand, and high cost of doing business.
The apex bank noted that the performance of the economy is expected to pick up in 2025, with real GDP growth projected at 5.4%, supported by resilience of key service sectors and agriculture, expected recovery in growth of credit to the private sector, and improved exports.
