Kenya’s inflation rate saw a slight uptick in December 2024, climbing to 3.0% from 2.8% in November, according to the Kenya National Bureau of Statistics (KNBS). The rise in inflation primarily resulted from higher food and fuel prices, which have burdened many households across the country. In response, the Central Bank of Kenya (CBK) made a strategic decision to lower its benchmark lending rate by 75 basis points to 11.25% in early December. This move aims to stimulate economic activity and provide relief to businesses and consumers during a period of rising costs. Financial analysts predict that the reduction will help ease the inflationary pressure and encourage borrowing, though experts warn that the government needs to address supply chain disruptions that have been a major contributor to price increases.
What’s Next for Kenya’s Economy?
Economists are closely watching Kenya’s economic trajectory as the country navigates global uncertainties and internal challenges. Analysts are also hopeful that the newly passed budget, focusing on infrastructure development and technological innovation, will help stabilize the economy in the first half of 2025.