Centum sees inflation peaking at 7pc in 2027
In its latest macroeconomic outlook, the diversified investment company said the projection would keep inflation within the Central Bank of Kenya’s target range of 2.5 to 7.5 percent.
Nairobi, Kenya - Centum Investment predicts that Kenya's inflation will reach a peak of seven percent in the fourth quarter of 2027, assuming the Strait of Hormuz remains partially accessible and Brent crude oil trades between $85 and $100 per barrel. This projection fits within the Central Bank of Kenya's target range of 2.5 to 7.5 percent inflation.
Centum's base case scenario, which has a 50% probability, envisions an uneasy equilibrium with Hormuz partially open and Brent crude trading within the aforementioned range. Headline inflation is expected to peak near 7.0% in the fourth quarter but remain within the 2.5% to 7.5% range. This forecast follows a slight increase in Kenya's annual inflation rate to 6.6 percent in August, up from 6.5 percent in July, primarily due to rising transport and food prices according to the Kenya National Bureau of Statistics (KNBS).
Prior to this, CBK Governor Kamau Thugge had lowered the projected inflation peak to 6.8 percent in January 2027 from a previous forecast of 7.2 percent in January. Centum anticipates the Central Bank Rate (CBR) to remain at 8.75 percent through December, with the first 25-basis point reduction possible in the first quarter of 2027.
Governor Thugge's decision to maintain the lending rate was based on stability in the foreign exchange market and inflation staying within the target range. Centum noted that the decision to keep the rate at 8.75% through December was conservative compared to the 8.00% to 8.25% forecasted in June.
Written by urgent.news from Capital Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
