In 2020, inflation averaged 5.2 percent, slightly lower than the 5.1 percent recorded in 2019 according to stats compiled by Cytonn Investments.
The inflation was varied throughout the year but closed at an eight-month high of 5.6 percent in December 2020, due to an increase in the food and non-alcoholic beverages index which was up 2.5 percent.
The year’s performance can be attributed to the low fuel prices experienced during the first half of the year, coupled with the favorable weather conditions experienced at the tail end of the year which has ensured that food commodity prices remained low through most of the year.
“We expect inflation to average 5.2 percent in 2021, within the government target range of 2.5 – 7.5 percent with inflationary pressure gradually easing off, due to improved agricultural production,” said Cytonn in a report.
According to the UN, there is a risk that a few locust swarms could breach the central region through the bulk should be constrained to the semi-arid regions.
As the economy finally opened in 2021, the Kenyan economy is expected to bloom, especially with tourists coming in from other countries. Howver, the many taxes imposed by the government are expected to hurt the common man on the ground.
At the same time, the Kenyan economy contracted by an average of 0.4 percent in H1’2020 and is projected to contract by an average of 1.0 percent in the whole of 2020 according to the World Bank.
The performance was driven by declines in most sectors with accommodation and food being worst hit declining by 83.3 percent as the travel ban affected them significantly.
The lockdown restrictions imposed on the onset of the pandemic led to subdued business performance throughout the year. This downturn was however mitigated by resilient growth in the agricultural sector which recorded a growth of 6.4 percent during the same period.