Kenya Inflation Eases in February as Food-Price Growth Slows

(Bloomberg) -- Kenyan inflation eased in February as food-price growth decelerated.

Consumer prices rose 4.5 percent from a year earlier, compared with a 4.8 percent increase in January, the Kenya National Bureau of Statistics said Wednesday in a statement emailed from the capital, Nairobi. Prices climbed 1.4 percent in the month.

A government-imposed cap on commercial lending rates, a drought and two disputed elections have weighed on economic growth in the world's largest exporter of black tea. The central bank has left its key rate at 10 percent since September 2016 to anchor inflation expectations and is scheduled to announce its next rates decision on March 19.

Prices of food and non-alcoholic drinks, which make up more than a third of the country's inflation basket, climbed 3.8 percent in February from a year earlier, compared with a 4.7 percent increase the month before. The Kenya Red Cross Society has appealed for 1.04 billion shillings ($10 million) to help 1.4 million people deal with the effects of repeated seasons of failed rains.

The Energy Regulatory Commission has raised prices at fuel pumps for six straight months following an uptick in global crude prices.

While the heavier-than-usual rain that's being forecast may destroy some crops, keeping pressure on food prices, inflation could slow to 3 percent by May, Stephanie Kimani, an economist at Nairobi-based Commercial Bank of Africa Ltd., said by phone Thursday.

(A previous version of this story was corrected to show the right month in the headline and lead.)

To contact the reporter on this story: Adelaide Changole in Nairobi at achangole2@bloomberg.net.

To contact the editors responsible for this story: Rene Vollgraaff at rvollgraaff@bloomberg.net, Ana Monteiro, Paul Richardson

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