In October, the country’s inflation rate hit 9.6%, its highest since May 2017. Since then, the inflation rate has slowly begun to drop.
According to Kenya’s statistics office, the country’s current inflation rate fell to 9.0% year-over-year in January from 9.1% a month earlier, making it the third straight month Kenya’s inflation has dipped. However, the country’s current inflation rate is still above the government's preferred band of 2.5%-7.5%.
The Kenyan National Bureau of Statistics reported that monthly inflation was 0.2% as opposed to 0.5% in December. The Central Bank of Kenya maintained its benchmark lending rate at 8.75% on Monday, claiming that the effects of its previous rate increase in November were still being felt throughout the economy.
The governor of the Central Bank of Kenya, Patrick Njoroge, noted 2 weeks ago that Kenya's economic development is expected to pick up, but the government must make sure the country’s debt is sustainable. As reported by Bloomberg.
In contrast to the projected 5.6% growth in 2022, the largest economy in East Africa may expand by as much as 6.2%, according to Njoroge, who made the announcement at the 53rd World Economic Forum in Davos Switzerland.
“We’re getting a respectable growth this year,” Njoroge stated.
“Kenya, which is the world’s biggest exporter of black tea and a popular wildlife tourist destination, will benefit from having a diversified economy and limited exposure to global economic undercurrents, according to Njoroge. “We are very local or regional in terms of trading partners,” he added.
It also helps that China recently eased its Covid-19 restrictions and would begin routine foreign travel, which might be a plus for East Africa in its effort to revitalize its tourism sector, including Kenya, which is a hot spot for tourists.
These new developments are despite the fact that National Treasury Cabinet Secretary, Njuguna Ndung'u, had advised citizens to brace themselves for difficult times ahead, at the beginning of the year. Read the story here.
He stated, "from all the things we have analyzed, 2023 is not looking good; there are clear signals that it is going to be a tough year and that the global economy is one example in terms of where we are going."
However, Bloomberg’s report disclosed that the president of the country, William Ruto aims to triple yearly tax revenues to 5 trillion shillings in five years, a move that might aid Kenya in reducing its fiscal deficit from a projected 5.8% of the gross domestic product in the current period to 4.3% in the year beginning July 1.
Additionally, the president promised to reduce spending by $300 billion until June.
