Kenya’s annual inflation rate increased marginally to 3.0% in December 2024, from 2.8% in November, remaining within the Central Bank of Kenya’s target range of 2.5% to 7.5%.
This slight uptick was primarily driven by rising food and transport costs, despite the Kenyan shilling’s strong performance this year.
According to the Kenya National Bureau of Statistics (KNBS), the Food and Non-Alcoholic Beverages index increased by 0.7% between November and December.
Notably, prices of maize flour (sifted, fortified, and loose) rose significantly, while some fruit and vegetable prices declined.
The transport index also contributed to the overall inflation increase, rising by 0.2%.
Conversely, the Housing, Water, Electricity, Gas, and Other Fuels index declined by 0.2%. This was primarily due to a slight decrease in electricity prices, offset by a rise in kerosene prices.
“The year-on-year headline inflation, as measured by the Consumer Price Index (CPI), was 3.0% in December 2024,” stated the KNBS report. This indicates a 3.0% increase in the general price level compared to December 2023.
Despite these increases, the shilling’s strength against major currencies provided some moderating influence.
On a year-to-date basis, the shilling has appreciated by 17.6% against the dollar, a contrast to the 26.8% depreciation recorded in 2023.
The Central Bank recently lowered its benchmark interest rate to 11.25% from 12%, reflecting the overall subdued inflationary environment and providing further support to the economy.
