Kenyan market outlook 2022: Inflation expectations

The Kenyan market witnessed a significant decline in inflation in December, with the rate dropping to 5.7% from November's 5.8%, marking the lowest level since September 2020. In a recent interview on CNBC Africa, Churchill Ogutu, an economist at IC Asset Managers, provided insights into the country's inflation trends and expectations for 2022. Ogutu highlighted that while there were fluctuations in the second half of the year, overall inflation remained within the central bank's target range of 2.5% to 7.5%. He emphasized that core inflation, excluding volatile fuel and food prices, remained subdued between 2% to 3%, reflecting weak demand in the economy post-COVID-19. Comparing Kenya's inflation stability to other African nations experiencing spikes, Ogutu noted that Kenya's trend was relatively steady. However, he acknowledged the challenges posed by global oil price pressures on fuel inflation, even as food inflation moderated from double to single digits throughout last year.