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Supply chain disruptions will likely persist in the coming months – a scenario that will force Kenyan firms to jack up prices hence dragging economic recovery efforts, as is seen today.
These are signs of mounting economic pain amid rising inflation rates, and weakening value of the Kenya shilling, even as the country shakes itself off the August elections.
Inflation figures
Inflationary concerns have been dominating the airwaves recently, rising to a fever pitch last month when the overall inflation rate hit 8.5 percent. As a result, the majority of Kenyan households are now pressed to the wall, with the present tough conditions unlikely to let up in the near future.
Figures by FocusEconomics Consensus Forecast panelists expect inflation to average 7.7 percent in 2022, which is up 0.6 percentage points from last month’s forecast. For 2023, the panel sees inflation averaging 7.1 percent.
For instance, the effect of high taxation and rising inflation has seen a lackluster supply of homes and consumer confidence in the housing market has been falling as a result, but that could change according to various sentiments from market players. Despite pandemic-related mortgage bailouts seen to be expiring.
The cost of steel prices, for instance, has subsequently affected the country’s construction industry, which heavily relies on steel for such functions as installation of reinforcing bars, manufacturing of heating and cooling equipment as well as internal fixtures and fittings.
As a result of the rising costs, local manufacturers of steel products have increased prices of goods ranging from construction bars to galvanized sheets and steel tanks to reflect soaring metal prices in the global market.
Annual inflation rate in Kenya increased to 8.3 percent in July of 2022.
The annual inflation rate in Kenya accelerated for the seventh consecutive month to 9.2 percent in September of 2022, above market forecasts of 8.6 percent and the ceiling of the central bank’s target range of 2.5 percent to 7.5 percent.