Headline inflation in Kenya continued to accelerate in August, printing at 8.5 percent y/y from 8.3 percent in the month prior.
This was the fastest pace of price growth in the economy since June 2017, as price pressure from a prolonged drought and a sell-off in the Kenyan shilling raised the cost of imported goods. Annual food and non-alcoholic drinks price growth, which accounts for a third of the inflation basket, quickened to 15.3 percent, driven by the cost of corn flour and grains.
Meanwhile, transport prices climbed 7.6 percent from 7 percent even as authorities left fuel prices unchanged in August. Overall inflation has remained above the Central Bank of Kenya’s 7.5 percent target for three months now, and with shilling weakness persisting, risks to the inflation outlook remain tilted to the upside in the coming months.