Kenya’s inflation rate remained unchanged at 3.8% year-on-year in June, mirroring the figure recorded in May, according to the latest data released by the Kenya National Bureau of Statistics (KNBS) on Monday. This stability offers some reassurance for policymakers and consumers amid ongoing economic adjustments and global uncertainties.
The inflation rate stayed comfortably within the Central Bank of Kenya’s (CBK) preferred medium-term target range of 2.5% to 7.5%. The steady figure reflects a relative balance in price dynamics, even as key components such as food and non-alcoholic beverages, transport, and housing continued to exert upward pressure on consumer prices.
On a month-to-month basis, inflation was also stable at 0.5% in June, maintaining the same pace observed in May. This suggests a modest but consistent increase in the cost of living for Kenyan households.
According to KNBS, the primary drivers of inflation were rising prices in food-related items—an outcome partly influenced by seasonal supply fluctuations and transportation costs. Additionally, higher costs in the transport sector, attributed to global fuel price movements and domestic logistics challenges, contributed to the overall price increases.
In response to the economic environment, the Central Bank of Kenya recently trimmed its benchmark lending rate by 25 basis points to 9.75%. The rate cut, announced in June, was aimed at supporting economic growth by making borrowing more affordable for businesses and individuals. This monetary policy adjustment comes at a time when the government is keen on stimulating domestic demand and supporting key sectors of the economy, including manufacturing, agriculture, and services.
Economists have lauded the CBK’s decision as a balanced move, considering the current inflation trajectory and the need for economic recovery. “The inflation rate is within a manageable range, allowing room for accommodative policies that spur growth without triggering runaway prices,” said an economist based in Nairobi.
As Kenya navigates post-pandemic recovery efforts and grapples with external shocks such as currency volatility and geopolitical uncertainties, maintaining inflation stability will be key. All eyes will now be on the upcoming months to see whether the current monetary stance sustains consumer confidence and economic resilience.
