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NEWS INDEPTH: Banks, businesses foresee moderate inflation - 3 months ago, 7 Nov 18:30

By: Charles Mwaniki

Banks and private sector companies expect the cost of living to rise, but remain contained within the preferred Central Bank of Kenya (CBK) range in the next one year, betting on stable food prices and muted spending pressure due to slow private sector credit growth.

The respondents in CBK’s market perceptions survey of September foresee only a gradual increase in prices of basic consumer goods and services, although their cautious optimism is likely to be tested if oil prices rise in the global market, which would have a significant downstream effect on the Kenyan economy.

The CBK, whose main mandate is price stability, prefers the rate of inflation to remain between 2.5 and 7.5 percent.

The introduction of value Added Tax (VAT) on petroleum products, as well as some basic food items, had been expected to push prices up significantly, but the fall in inflation, the cost of living measure, from 5.7 ...
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Category: business opinion news economy markets corporate lifestyle

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