Oil prices threaten economic recovery

Signals that inflation rates are slowing are certainly good news for businesses and consumers. Data released by Kenya National Bureau of Statistics indicated the year-on-year rate fell to 3.7 per cent last month from four per cent a month earlier. Thanks to slower increases in food prices, the rate is at its lowest levels since October of 2005, when it was also at 3.7 per cent. (However, the two measures were calculated in different ways and are not directly comparable.)

The current ‘headline’ rate is also well below the Central Bank of Kenya target of five per cent. Weaker inflation has allowed the CBK to ease monetary policy this year and help the country’s economy rebound from the effects of the global recession, even as the rest of the world is beginning to withdraw stimulus measures.