Kenya’s headline inflation rose to 3.3% in January to a 4- month high from 3% in December 2024, still below the Central Bank of Kenya’s (CBK) midpoint target of 5% for the 8th consecutive month.
- •This comes ahead of CBK’s monetary policy meeting on 5th February 2025, cementing expectations of further rate cuts.
- •According to data from the Kenya National Bureau of Statistics, the increase was primarily driven by rising food and energy prices in the period.
- •Monthly inflation was up 0.7% resulting in an increase in the overall index from 141.66 in December 2024 to 142.68 in January 2025.
“Core inflation contributed 2.0 points to the overall inflation while non-core contributed 1.3 points to the same in January 2025. Food and non alcoholic beverages contributed 1.6 points to the non-core inflation rate,” KNBS noted in the report.
Food and non-alcoholic beverages prices increased by 1.6% between December 2024 and January 2025 mainly driven by increases in prices of tomatoes, cabbages and onions. The increases were however tempered by a drop in prices of cooking oil and mangoes.
Electricity and gas prices declined by 0.7% between December 2024 and January 2025 while the price of kerosene went up 2%.
Despite increases in both petrol and diesel prices during the period, country bus fares dropped by 25% cooling down from the hiked prices in the festive season. This prompted the 0.4% decline in the Transport indeed over the period.
Prices of private tuition-primary rose 1.6% in the month resulting in a 1.6% increase in the education index.
In January 2025, core inflation, which excludes highly volatile items from the basket, was 2.0% as the core index increased from 127.50 in December 2024 to 127.77 in January 2025. Non – core inflation stood at 7.1% in the same period.
Kenya’s inflation has been consistently below the CBK’s midpoint target for 8 months and is likely to influence the central bank’s decision on interest rates next week. In December, the CBK projected the headline inflation to peak at 3.3% in March 2025.
