IMF Report Projects Reduction in Changes of Consumer Prices

Agriculture CS Mithika Linturi inspecting unga prices at supermarkets on November 23, 2023.
Agriculture CS Mithika Linturi inspecting unga prices at supermarkets on November 24, 2023.
Photo
CS Linturi

The International Monetary Fund (IMF) is projecting a decline in percentage change of consumer prices, signalling a more stable cost for basic goods.

In its World Economic Report published on Thursday, April 18, it was projected that the percentage change in consumer prices in 2024 would be 6.6 per cent, a drop from the 7.7 per cent that was witnessed in 2023.

These figures give Kenyans a reprieve knowing that some of the household items that they use such as foodstuff and fuel will not increase drastically in that period.

However, it is important to that that the prices of individual foodstuffs may be affected by other factors such as weather.

President William Ruto (left) talking to an official from the International Monetary Fund (IMF) in Italy on January 29, 2024
President William Ruto (left) talking to an official from the International Monetary Fund (IMF) in Italy on January 29, 2024
PCS

Likewise, in 2025, the global financial institution is projecting for price change of 5.5 per cent.

By 2029, it is projected that consumer prices will change at an annual average of 5 per cent.

Notably, the figures for 2023 were among the highest surpassing the 7 per cent mark. Meanwhile, the report highlighted that the highest figures were reported in 2017.

This was a year when there was a severe drought and the elections.

"Consumer price indexes (CPIs) are index numbers that measure changes in the prices of goods and services purchased or otherwise acquired by households, which households use directly, or indirectly, to satisfy their own needs and wants.

"In practice, most CPIs are calculated as weighted averages of the percentage price changes for a specified set, or "basket", of consumer products, the weights reflecting their relative importance in household consumption in some period," IMF explained.

Notable, the projections come at a time when President William Ruto's administration unveiled plans for a lower rate at which food prices change over time.

In particular, Ruto's economic advisor David Ndii noted that the government was keen on lowering the rate to below 5 per cent from May.

He noted that this would be achieved by the government initiatives in the agricultural sector such as the fertiliser subsidy programme.

We are on track for an inflation rate below 5 per cent by May.  The next stop is to tame the budget deficit, deepen agricultural transformation, accelerate electric vehicle transition and lower inflation target to 3.5% (+/- 1.5)," he stated.

President William Ruto (centre), his deputy Rigathi Gachagua (second from left) and economic advisor David Ndii (left) engage in discussions during a retreat in Naivasha on February 21, 2024.
President William Ruto (centre), his deputy Rigathi Gachagua (second from left) and economic advisor David Ndii (left) engage in discussions during a retreat in Naivasha on February 21, 2024.
PCS