Kenya: Inflation declines in January on lower oil prices and stronger shilling

Consumer prices increased 0.35% over the previous month in January, following a 0.65% month-on-month rise in December. Education recorded the biggest upturn in prices, followed by food and non-alcoholic beverages. On the other hand, prices for transport fell—the only category to do so—likely owing to a sharp drop in fuel prices in the month.

Inflation fell to 4.7% in January, from 5.7% in December, remaining within the Central Bank’s medium-target range of 2.5%–7.5%. A fall in the international oil price, along with lower food prices, amid a strengthening in the shilling, were behind the notable drop in January. Annual average inflation remained at 4.7% in January, matching December’s print.

Kenya Inflation Forecast

FocusEconomics Consensus Forecast panelists expect inflation to average 5.6% in 2019, which is down 0.1 percentage points from last month’s forecast. For 2020, the panel sees inflation averaging 5.8%.