Kenya will begin releasing core inflation statistics in order to improve targeting

Kenya’s statistics office will start releasing core inflation figures on Tuesday, officials said, to enable monetary authorities better forecast how their interest rate choices will affect the country’s economy.

In its monthly releases, the statistics bureau has been emphasizing headline inflation, which includes volatile components like food and fuel. This has compelled the central bank to separate the data and calculate the inflation that is not related to food and fuel.

According to the Kenya National Bureau of Statistics, “central banks frequently use it (core inflation) as a more reliable measure of inflation to inform monetary policy decisions and communication with the public.”

“It has become imperative to have an official comprehensive measure of core inflation for Kenya.”

When the food and fuel components of inflation are taken into account, policymakers contend that it is difficult to achieve price stability in the economy with monetary instruments since these elements are typically caused by supply-side variables like weather, which are out of their control.