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World Bank expects Kenya’s cost of living to ease from 2023

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By Judith Gicobi

The World Bank predicts that Kenya’s cost of living would decline starting in 2023, indicating that inflation has reached its high.

According to the World Bank’s most recent economic forecast for Africa, the Africa Pulse, Kenya’s inflation would drop to 6.4% in 2023 and 5.5% in 2024.

Living standards are predicted to ease due to a predicted slowdown in the forces that are now driving up inflation.

High global crude oil prices and unfavorable weather patterns that have caused a severe drought and are putting millions of people at risk of famine and starvation are some of the contributing factors.

The World Bank predicts that non-resource-rich nations like Kenya and Ethiopia, who also share comparable inflation drivers, would experience a fast disinflation process, as opposed to resource-rich nations, which are predicted to experience a lengthier disinflationary process.

At the end of last month, Kenya’s inflation rate reached a fresh five-year high of 9.2%, the highest reading since June 2017.

As the cost of petrol in the nation averages north of Ksh.180 per litre, the removal of fuel subsidies was the main cause of inflation in the month.

However, food inflation has continued to rise, reaching a monthly high of 15.5% due to a weaker-than-expected agricultural production.

In the meantime, food inflation has been rising, reaching a monthly high of 15.5% due to a weaker-than-expected agricultural output.

Along with consumers, private sector businesses have been negatively impacted by the high inflation rate as a result of the decreased demand for their products and services.

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The Central Bank of Kenya (CBK) increased the benchmark interest rate last week from 7.5 percent to 8.25 percent in an effort to control inflation expectations. This move was made in anticipation of second round inflationary consequences.

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