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Kenyan Inflation Rises to 32-Month High

Bloomberg Markets •
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Kenyan inflation accelerated to the highest level in more than two and a half years in September, driven by higher energy and food prices. Annual consumer prices rose 6.8% in the month, the Kenya National Bureau of Statistics said Wednesday in a statement, compared with 6.6% in August. The median estimate of three economists in a Bloomberg survey was 6.9%, while the monetary policy committee had projected the rate at 6.5%.

Core inflation, the central bank’s preferred gauge of underlying price growth, advanced to 4% compared with 3.4% in August, as price pressures became firmer and extended beyond volatile food and energy items. It was the sixth month in a row that inflation’s breached the 5% midpoint of the central bank’s target range. Governor Kamau Thugge expects inflation to remain within the 2.5%-7.5% range in the near term.

Still, the reading may weigh on the monetary policy committee’s decision at its meeting next month. The East African nation’s central bank has so far taken a wait-and-see approach to the energy shock caused by the Iran war. Food and non-alcoholic drinks — which make up a third of the inflation basket — rose 9.5%.

The segment continues to face pressure from a cocktail of factors including an ongoing drought, Iran war, upcoming El Nino, and Black Sea disruptions. The transport index grew 15.6% even after authorities left gasoline prices unchanged during a mid-month review.