Businesses & Financial News

Inflation cools for the first time in 9 months

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By Monica MUEMA

Kenya’s monthly inflation rate has slowed down for the first time in nine months on the back of a drop in food and fuel prices and rate hikes to contain the cost of living measure.

Consumer prices fell to an annual 9.5 percent in November from 9.6 percent the month before as elevated inflation squeezed household budgets and demand for goods and services.

The country’s annual inflation accelerated for the eighth straight month to 9.6 percent in October of 2022, from 9.2 percent in September and above market forecasts of 9.5 percent. It was the steepest inflation rate since May of 2017, breaching the upper limit of the central bank’s target range of 2.5%-7.5% for the fifth month.

The increase came even as the Central Bank of Kenya (CBK) raised the key lending rate by 75 basis points to 8.25 percent, matching the Federal Reserve hike in September as central banks struggle to tame inflation.

According to business executives responding to a Service Sector Outlook Survey, activity in the country’s services sector increased at a marginal pace in October.

The revenue index by Stanbic Bank Kenya Purchasing Managers Index (PMI) – a key measure of the private sector conditions, posted 50.2 to signal only a fractional improvement in operating conditions in the period under review.

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