Kenya’s inflation rate has risen for the fourth consecutive month, standing at 3.5% in February 2025, up from 3.3% in January. Despite the increase, the rate has remained below 5% since June 2024, following an all-time high of 9.2% in 2023. The Central Bank has lowered interest rates to stimulate the economy and manage inflation effectively.
Kenya’s inflation rate has shown a concerning trend, marking its fourth consecutive increase since October 2024. As of February 2025, the inflation rate rose to 3.5%, an increase from 3.3% in January. Despite this rise, Kenya has managed to keep inflation below the 5% threshold, reflecting significant progress since the all-time high of 9.2% recorded in 2023.
The Kenyan National Bureau of Statistics reported fluctuating inflation rates, reflecting a decrease from 4.4% in August to 3.6% in September 2024, before easing further to 2.7% in October. However, inflation has steadily increased thereafter, culminating in the 3.5% figure for February. These insights were shared in a recent email sourced from Bloomberg.
Core inflation, which omits volatile agricultural prices and energy, revealed a lack of demand, while food and non-alcoholic beverage prices surged by 6.4% in February. Moreover, transport costs rose by 0.7%. Notably, stable global fuel prices are expected to positively impact energy costs in Kenya, where housing and utility prices decreased by 0.8%.
In parallel, the Central Bank of Kenya has acted decisively, lowering the main interest rate to 10.75% during its February 5 meeting to stimulate lending and economic growth. Notably, inflation decreased consistently from 6.3% a year ago to 5.7% in March, ultimately settling at 5.0% before June.
In summary, while the inflation trajectory presents challenges, the commitment to keeping rates below the critical 5% mark reflects Kenya’s strategies to stabilize its economy in light of previous high inflation rates. The government’s ongoing involvement in managing interest rates and monitoring price movements will be crucial in navigating this economic landscape effectively.
In conclusion, Kenya’s inflation rates have experienced a troubling rise for the fourth consecutive month, moving from 3.3% to 3.5% in February 2025. Despite this increase, the government has displayed resilience by maintaining rates below the critical 5% mark since June 2024. Ongoing interventions from the Central Bank to encourage lending and stimulate growth are pivotal in addressing inflationary challenges, especially as external factors, such as global fuel prices, play a significant role.
Original Source: africa.businessinsider.com
