Kenya's inflation rate has risen for the 4th consecutive month, reaching 3.5% in February 2025, according to the latest figures from the Kenyan National Bureau of Statistics. This marks a steady increase since October 2024, with the rate rising from 3.3% in January. Despite efforts to keep inflation below the 5% target range, the country's inflation rate has been on an upward trajectory since November last year.

Historically, Kenya's inflation rate has been volatile, hitting an all-time high of 9.2% in 2023. However, the country managed to keep its inflation rate below the 5% mark since June 2024, which was seen as a significant achievement. The recent increase in inflation rate is a cause for concern, as it may impact the country's economic growth and stability.

The 2% core inflation rate, which excludes energy and the cost of volatile agricultural staples, showed weak demand. This suggests that the increase in inflation rate is not driven by strong economic growth, but rather by external factors. The prices of food and non-alcoholic drinks, which make up a third of the inflation basket, rose 6.4% in February from 6.1% a month earlier, contributing to the increase in inflation rate.

Transport costs rose 0.7%, similar to January, after the nation left gasoline prices unchanged during the mid-month review. However, a drop in global fuel prices may ease energy prices and have a positive impact on Kenya's inflation rate in the future. Housing, water, electricity, gas, and other fuel prices fell 0.8% in February from -1.6% a month earlier, which may also help to mitigate the impact of the increasing inflation rate.

In response to the rising inflation rate, Kenya's central bank lowered its main interest rate to 10.75% on February 5 and announced plans to take more action to encourage lending and accelerate economic expansion. This move is aimed at stimulating economic growth and reducing the impact of the increasing inflation rate on the economy.

The rising inflation rate in Kenya has implications for the entire East African region, as it may impact trade and economic activity. The Kenyan government and central bank will need to closely monitor the situation and take proactive measures to ensure that the inflation rate does not spiral out of control. With the country's inflation rate expected to continue rising, it remains to be seen how the government and central bank will respond to this challenge.

In conclusion, Kenya's inflation rate rising for the 4th consecutive month is a cause for concern, and the government and central bank will need to take proactive measures to address the issue. The impact of the rising inflation rate on the economy and trade in the East African region will be closely watched, and it remains to be seen how the situation will unfold in the coming months.