This archive report was first published on 16 December 2019.
Kenya's economy is bracing for a possible inflation surge in 2020, with banks and businesses forecasting prices to remain above 5pc.
According to the Central Bank of Kenya's (CBK) November Market Perceptions Survey, businesses polled expect inflation to average above 5pc in almost all sectors in the next 12 months.
The forecast is driven by higher input costs, taxes, and possible maize shortage, which are expected to put pressure on prices until the end of the year.
However, a stable exchange rate and weak demand are expected to help keep the cost of living within range, although there remains a risk due to supply-side shocks.
Businesses cited higher cost of production, fluctuations in international oil prices, and increase in prices of food items such as maize flour as likely risks to inflation over the next 12 months.
Most respondents reported increases in costs related to energy, transportation, raw materials, freight charges, and construction materials, while the cost of labour remained largely the same during the period.
Private sector players polled believe transport costs would rise further, energy costs would gain in the short term, and raw materials would drive up production costs.
