The report
states that year-on-year inflation eased mainly due to a reduction in food
prices and the appreciation of the Kenyan shilling against major world
currencies between July and December 2024.
For the food and non-alcoholic beverages category, inflation rose at a slower rate of 5.6 per cent in 2024, compared to 9.7 per cent in 2023, largely due to increased food supply driven by favourable weather conditions.
In 2024, the transport index rose by 5.0 per cent, mainly driven by higher matatu and country bus fares. However, this was a slower increase compared to 12.2 per cent in 2023.
The alcoholic beverages, tobacco, and narcotics category reported an inflation rate of 7.8 per cent, mainly due to higher prices of miraa, cigarettes, beer, wines, and spirits.
Coffee and coffee substitutes recorded the highest rate of inflation in 2024, at 21.7 per cent, largely due to rising coffee prices.
“The easing of inflation in 2024 across various income groups was mainly due to reductions in food prices, such as maize grain and maize products like maize flour,” the report notes.
“The decline was also attributable to lower inflation in the transport sector, where petrol and diesel prices decreased in 2024 compared to 2023.”
During the review period, prices of cocoa drinks rose by 16.3 per cent, mainly due to an increase in the cost of cocoa and cocoa products.
However, sugar, confectionery, and desserts recorded a negative inflation rate of 10.7 per cent, reflecting a drop in sugar prices.
Among food items, cabbages, kales (sukuma wiki), and English potatoes recorded the highest price increases, at 23.4, 21.5, and 20.9 per cent, respectively. By contrast, maize grain prices saw the largest decrease, at 19.3 per cent, leading to lower maize flour prices.
The Nairobi middle-income group recorded the highest inflation in 2024, at 5.1 per cent. Over the same period, Nairobi’s lower-income group experienced the lowest inflation, at 4.2 per cent.
The effects of high exchange rates were particularly felt early in the year among Nairobi’s upper- and middle-income groups, resulting in higher prices of imported commodities and, consequently, higher inflation in their consumption baskets.
