Kenya’s inflation rate rose to a four year high of 6.1 per cent a rise from the 5.4 per cent that was reported in 2020, according to the Economic Survey 2022 released by the Kenya National Bureau of Statistics (KNBS).
This was the highest inflation rate recorded in the country since 2017 when it hit eight per cent. The rise is mainly attributed to an increase in the prices of fuel and food items.
Key Drivers of the 2021 Inflation Rate
Transport Index recorded the highest inflation rate of 12.3 per cent on account of increased prices of petrol and diesel. According to the KNBS report, all economic activities registered positive growths in 2021 except agriculture.
Kenya’s export earnings improved from Sh643.7 billion in 2020 to Sh743.7 billion in 2021. Horticulture and tea were the main exporters earning Sh165.7 billion and Sh130.9 billion respectively.
Imports increased from Sh1,643.6 billion in 2020 to Sh2,151.2 billion in 2021, driven by the ease on Covid-19 freight restrictions. Petroleum products and industrial machines brought in Sh335.3 billion and Sh254.8 billion respectively.
There was a 6.9 per cent growth in manufacturing in 2021 compared to a negative 0.4 per cent growth in 2020. The manufacturing value of output in 2021 was Sh876.4 billion.
While the country recorded a 7.5 per cent GDP growth rate, KNBS projects the macroeconomic environment to remain stable despite the likelihood of a rise in inflation, a weakening of the Kenyan Shilling against its major trading currencies and a significant rise in energy prices.
