Kenya’s annual inflation rate climbed to a five-month high in February, hitting 3.5% as food prices continued to increase. The new inflation figure was released in a statement by the National Bureau of Statistics, indicating a rise from the 3.3% rate recorded in January this year.
The bureau noted that Core inflation remained at 2.0% in February, unchanged from January, while non-core inflation rose to 8.2% in February from 7.1% the previous month.
Prices of food and non-alcoholic drinks – which make up a third of the inflation basket – rose 6.4% in February from 6.1% a month earlier. Transport costs rose 0.7%, similar to January, after the nation left gasoline prices unchanged during the mid-month review.
A drop in global fuel prices bodes well for Kenya, which imports refined petroleum products, and may ease energy prices. Housing, water, electricity, gas and other fuel prices fell 0.8% in February from -1.6% a month earlier.
- Advertisement -
Also, Inflation has been below the 5% midpoint of the central bank’s target range, where it prefers to anchor expectations, since June and is expected to remain so in the near term. Based on this, Kenya’s central bank cut its main interest rate for the fourth meeting in a row to 10.75% on February 5, saying it wanted to do more to support lending and boost economic growth.
The central bank also said inflation is expected to remain below the midpoint of the 2.5%-7.5% target range in the near term.
