Kenya’s inflation climbed to a three year high in October. The annual rate rose to 7.3 percent from 6.8 percent in September, matching the level last recorded in July 2023, according to the Kenya National Bureau of Statistics. The consumer price index rose 0.7 percent on the month, from 156.47 in September to 157.60 in October.
The drivers are the imported and administered parts of the basket. Transport prices rose 17.1 percent on the year and 1.7 percent on the month, the sharpest monthly increase among the major categories, after petrol prices rose 6 percent to 227.85 shillings per litre and diesel 4.4 percent to 228.77 shillings. Food and non-alcoholic beverages rose 10.2 percent on the year, and housing, water, electricity, gas and other fuels rose 3.7 percent. Together the three categories account for more than 57 percent of the index weight.
Underlying inflation is moving too, but more slowly. Core inflation rose to 4.3 percent from 4.0 percent, while non-core inflation, which tracks food, fuel and energy, rose to 15.1 percent from 14.0 percent. The headline rate has now risen for most of the year, from 4.3 percent in February, and has spent seven consecutive months above the 5 percent midpoint of the target range.
The Central Bank of Kenya held its benchmark rate at 8.75 percent on October 7, its fourth hold in a row, while warning that food, fuel and transport costs could keep inflation elevated through November. October delivered that warning in full. With the headline rate 0.2 points from the 7.5 percent ceiling of the target range, the December meeting is now a live decision rather than a formality.