Kenya's inflation rate reached a six-month low of 4.1% in February 2019, driven by declining food prices including maize, vegetables, and sugar, according to analysis from financial institutions.
Analysts at Commercial Bank of Africa (CBA) noted that falling food costs and weak demand pressures could offset rising fuel prices, which are expected to increase in March 2019 due to delayed import deliveries. The bank's report emphasized that food items, which make up 36% of the consumer price index, would continue to suppress overall inflation.
Citi economists echoed this outlook, stating that low food inflation would keep the cost-of-living increase within the Central Bank of Kenya's target range of 2.5-7.5% through 2019. However, they warned that the base effect of 2018's unusually low food prices could push inflation toward 5% by year-end.
David Cowan, Citi's chief Africa economist, highlighted that food inflation had consistently exceeded overall inflation in recent years but had aligned with broader trends since mid-2018. He cautioned that while short-term inflation risks remained low, the 2019 outlook depended on sustained food price stability.
