Kenya’s annual inflation rate has dropped to 2.7 per cent in October 2024, down from 6.9 per cent last year at the same period, the national statistics office has revealed.

According to the Kenya National Bureau of Statistics (KNBS), the inflation rate in October 2024 is also a further drop from the 3.6 per cent rate recorded in September. On a monthly basis, inflation from September to October registered a modest rate of 0.2 per cent.

“Overall year-on-year (annual) inflation rate as measured by the Consumer Price Index (CPI) was 2.7 per cent, in October 2024; a decrease from an inflation rate of 3.6 per cent recorded in September 2024.
Consumer Price Index is a key macroeconomic indicator used to monitor price movements and how they affect policy decisions. It is defined as a measure of the weighted aggregate change in retail prices paid by consumers for a given basket of goods and services. The month-to-month inflation rate was 0.2 per cent in October 2024,” said KNBS in a statement.

The 2.7 per cent annual rate reflects a slow increase in the cost of commodities over the past year.

KNBS attributes the slowdown to movement in prices of commodities under the classifications of Individual Consumption by Purpose (COICOP) divisions. They include food and non-alcoholic beverages, housing, water, electricity, gas and other fuels, and transport.

Maize flour, wheat flour, kales, petrol and diesel saw a slight decrease in process in October. However, despite the positive fall in annual inflation rate, a number of key commodities recorded an increase in price in the month of October.

Several food items
Prices for several food items among them cooking oil, beef, tomatoes, oranges, carrots, and mangoes rose substantially in October compared to September.

Prices of mangoes, carrots, oranges, and tomatoes rose by 9.9 per cent, 5.7 per cent, 5.1 per cent and 3.7 per cent respectively. Prices of sugar, maize flour-sifted and fortified maize flour decreased by 2.3, 1.8 and 1.7 per cent, respectively between September 2024 and October 2024.

The Housing, Water, Electricity, Gas and other Fuel’s Index dropped by 0.3 per cent between September 2024 and October 2024 attributable to decrease in prices of kerosene and LPG by 4.3 per cent and 0.4 per cent, respectively.

During the same period, however, prices of 50 kilowatts of electricity and 200 kilowatts of electricity increased by 0.3 per cent and 0.2 per cent, respectively.

The announcement by KNBS comes at a time when the government is targeting an inflation rate of between 2.25 per cent and 7.5 per cent in the medium term.

The Transport Index declined by 0.3 per cent between September and October 2024. This, according to the statistics office, was mainly due to decrease in prices of petrol and diesel by 4.3 per cent and 2.0 per cent, respectively.

Earlier this month, the Central Bank of Kenya (CBK) reduced its benchmark lending rate by 0.25 per cent due to falling inflation in recent months.

As inflation moderates and businesses hopeful of a stabilized economy, factors such as global fuel prices could affect the inflation rate in future.