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Kenya Inflation December 2023

Kenya: Inflation falls to lowest level since April 2022 in December

Inflation ticked down to 6.6% in December from November’s 6.8%. December’s reading represented the lowest inflation rate since April 2022. The moderation was largely due to softer price growth for transport and housing and utilities, which outweighed increasing price pressures for food and non-alcoholic beverages.

In addition, the trend pointed down slightly, with annual average inflation coming in at 7.7% in December (November: 7.9%).

Finally, consumer prices increased 0.38% in December over the previous month, picking up from the 0.23% rise logged in November.

On the outlook for inflation, analysts at the EIU commented:

“A small uptick in oil prices will add to cost pressures, but food prices (the largest component of the consumer price index) will rise at a much slower pace in 2024, given the emergence of the El Niño weather system, which typically leads to wetter weather and higher farm production in East Africa. Another inflation dampener in 2024 will be a slower pace of shilling depreciation. Steep tax rises in 2023 will drop out of the inflation equation during the second half of 2024, and future tax increases will be of a smaller magnitude.”

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