Inflation in Kenya accelerated in September to its highest level in more than two and a half years, driven by rising energy and food prices. The annual increase in consumer prices was 6.8% compared to 6.6% in August, the Kenya National Bureau of Statistics reported on Wednesday. The median estimate from three economists in a Bloomberg survey was 6.9%, while the monetary policy committee forecasted 6.5%.
Core inflation, which the central bank considers the preferred indicator of underlying price growth, rose to 4.0% from 3.4% the previous month. Price pressures have become more persistent and have extended beyond volatile items such as food and energy. This marks the sixth consecutive month that inflation has exceeded 5%, the midpoint of the regulator's target range. Governor Kamau Thugge expects the rate to remain within the 2.5–7.5% range in the near term.
Food and non-alcoholic beverages, which account for a third of the inflation basket, increased by 9.5%. This segment is facing pressure from several factors: ongoing drought, external energy shocks, the upcoming El Niño, and supply disruptions in the Black Sea region. The transport index rose by 15.6% even after authorities kept gasoline prices unchanged following a mid-month review. According to Jacques Nel, head of Africa Macro at Oxford Economics, food inflation will be the main driver of price increases and will push the overall rate in Kenya "above 7.0% year-on-year in the next one to two months."
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