Kenya’s inflation slowed for the second consecutive month to 9.1% in Dec 2022

By Monica MUEMA

Kenya’s inflation rate slowed for the second consecutive month to 9.1% in December 2022, the lowest since August compared to 9.5% a month before.

The annual inflation rate stood at 9.5% in November of 2022, holding close to a near 5-1/2-year high of 9.6% in the previous month but below market estimates of 10.1%.

To put this into perspective, while high inflation is generally considered harmful, some economists believe that a small amount of inflation can help drive economic growth.

The opposite of inflation is deflation, a situation where prices tend to decline. If commodity prices are declining overall, consumers could pull back on spending money because they expect costs will be even lower in the future.

Prices slowed down a bit for food & non-alcoholic beverages (15.4% vs 15.8% in October); furnishings & household equipment (10.6% vs 10.9%) and housing & utilities (6.1% vs 7.1%).

Kenyans have already seen some of those price declines happen. Gas prices or fuel prices have remained largely ‘stable’ and ‘flat’ in the last two reviews by the Energy and Petroleum Regulatory Authority (EPRA), according to the Consumer Price Index.

Conversely, prices continued to climb mostly for transportation (11.7% vs 11.6%), alcoholic beverages & tobacco (7.2% vs 6.7%); restaurants & hotels (6.2% vs 5.3%) and personal care, social protection and miscellaneous goods and services (7% vs 6.1%).

On a monthly basis, consumer prices increased by 0.3%, down from 0.9% in the previous month.