In a significant milestone for Kenya’s economic planning, Kenya National Bureau of Statistics (KNBS) and Central Bank of Kenya (CBK) have officially launched the country’s first comprehensive Core and Non-Core inflation report.
The launch follows months of collaboration between the two institutions, culminating in a technical workshop held in Naivasha back in June 2024.
The new measures, which provide deeper insights into price dynamics, are set to transform how inflation is analyzed and addressed.
Speaking during the launch, Principal Secretary (PS) for Economic Planning James Muhati said the report marked a significant milestone in the government’s ongoing efforts to provide greater transparency, deeper insights and more effective responses to inflationary trends that affect the country’s major businesses and households.
He added that the report was a very important milestone in the government’s journey regarding to improving its focus on the quality of its data.
“When we talk about data quality, we mean factors that must be met in regard to the data that we must be providing,” stressed the PS, adding that it must be available, timely, and verifiable among other factors.
Muhati disclosed that the report was a joint effort between the KNBS and CBK which has been developed in line with the international based practices.
According to the PS, the collaboration was testament to the government’s commitment to sound and reliable data and a basic foundation for informed policy and effective decision making.
“Inflation is a multifaceted phenomenon faced by numerous factors. Traditionally, a single inflation measure has served as a general gauge for price changes and this approach can secure critical details,” he explained.
Also speaking at the event, KNBS Director General (DG) Dr. MacDonald Obudho described the initiative as a step towards providing more precise and actionable data for economic policy formulation.
He underscored that core inflation, derived from the national Consumer Price Index (CPI), excluded volatile items such as food and fuel to offer a more stable measure of underlying inflation.
According to Dr. Obudho, the data would enable policymakers to focus on long-term trends rather than short-term fluctuations caused by weather patterns or global shocks, such as the Russia-Ukraine conflict or rising fuel prices.
“The CBK will now have readily available core inflation data, which eliminates the need for additional calculations and ensures faster decision-making,” stated the DG.
Dr. Obudho maintained that the report aligned Kenya’s inflation measures with guidelines from the East African Community (EAC).
He added that while the EAC recommended a basket of 279 items, KNBS has refined this further, using a basket of 275 items to reflect the unique circumstances of Kenya’s economy.
He further stressed that statistics must adhere to international and regional standards to allow cross-border comparisons,” explained Dr. Giobudo.
“Our adjustments ensure that Kenya remains compliant while providing data tailored to our local context,” affirmed the DG.
In his remarks, CBK Governor Dr. Kamau Thugge emphasized the importance of the new measures in achieving macroeconomic stability.
Dr. Thugge noted that core inflation would serve as a critical tool for formulating monetary policies aimed at maintaining price stability and fostering sustainable growth.
The Governor insisted that CBK’s principal objective was to maintain stability in the general level of prices.
“With this new data, we are better equipped to achieve our targets and support Kenya’s economic goals, including employment creation,” he added.
By Clinton Ng’iela and Jesee Otieno