Year-on-year inflation in Kenya declined to 9.1% in December 2022 from 9.5% recorded the previous month, the statistics office said.
The Kenya National Bureau of Statistics attributed the easing to lower food and fuel prices, but the inflation rate remained above the government’s target range of 2.5% – 7.5%.
The country’s average inflation rate for 2022 stood at 7.6%, 1.5% points higher than the average inflation rate of 6.1% recorded in 2021, according to Cytonn Investments.
The relatively high inflation can be attributed to the increase in prices of major commodity indices, with the food and non-alcoholic index and transport index registering the highest year-on-year (y/y) increases of 13.8% and 13.0%.
In November, the Monetary Policy Committee (MPC) hiked the Central Bank Rate (CBR) by an additional 50.0 bps to 8.75% to anchor inflation.
“We expect the MPC to continue raising the CBR rates to stabilize inflation within the government’s target range and anchor the Kenyan shilling that has suffered a 9.0% YTD depreciation against the US Dollar,” says Cytonn in its Annual Markets Review – 2022.
