President William Ruto chaired a Cabinet meeting at State House, Nairobi, today, and was briefed on the impressive stability of the macro-economic situation in the country following two years of deliberate fiscal management measures.
The Kenyan economy continues its strong recovery from past global and domestic challenges, achieving robust growth.
Members were informed that inflation, which reflects the increase in prices over time, had declined substantially to 2.7 per cent last month, down from a high of 9.6 per cent in September 2022.
This is the lowest inflation rate since 2007 during President Mwai Kibaki’s tenure, and aligns with the target set in the Kenya Kwanza Manifesto.
Consequently, the prices of various types of food, particularly maize, beans, and peas, have decreased over the past year. A 2kg packet of maize, which was retailing at KSh176 a year ago, is now selling at KSh124.
The Cabinet was also informed that foreign exchange reserves at the Central Bank are at an all-time high of $9.5 billion, an increase of $2.4 billion, equivalent to 4.4 months of export cover.
The meeting was further briefed that the country’s economic growth has remained steady and ranks among the highest globally, at 5.6 per cent in 2023, with an estimated growth of 5 per cent this year and 5.6 per cent next year.
Regarding the exchange rate, the Cabinet noted that it has stabilised at KSh129 from KSh162, after appreciating by nearly 20 percent earlier in the year. This appreciation has led to reduced external debt service.
Interest rates are beginning to decrease, which will result in lower domestic interest rate costs, creating fiscal space.
On the revenue side, the Kenya Revenue Authority’s tax collections have grown by double digits. Tax revenue increased by 11.5 per cent in the year to June 2024.
