Weak demand to keep inflation rate in check

Food inflation, which has been the key driver of the cost of living in the past few months, came down to 8.1 per cent in June from 10.6 per cent in May. FILE PHOTO | NMG

Weak demand for goods due to the effects of Covid-19 on the economy will keep inflation towards the lower end of the Central Bank of Kenya’s (CBK) preferred range in the third quarter of the year, despite an increase in fuel prices that would normally push the cost of living higher.

Analysts at city-based investment bank Genghis Capital said in a third-quarter macroeconomic report they see inflation averaging about 4.5 per cent over the three months ending September, attributed to muted consumption side pressure.

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