NAIROBI, July 5 (Xinhua) -- Kenya has set an inflation target at 5 percent for the fiscal year 2023/2024 to sustain macroeconomic stability.
The target would have a flexible margin of 2.5 percent, said Njuguna Ndung'u, cabinet secretary for the National Treasury and Economic Planning, in a statement released Wednesday.
"The flexible margin on either side of the inflation target is to cater for effects of external shocks such as adverse effects of the impact of the Ukraine-Russia conflict and other global disruptions on the Kenyan economy," Ndung'u said, adding that the central bank is expected to achieve the target.
To contain rising inflation, the Central Bank of Kenya on June 27 raised the benchmark lending rate by 1 percent to 10.5 percent, the highest raise since 2018.
The monetary policy, according to Ndung'u, coupled with improved agricultural productivity and increased importation of food items is expected to help lower the country's inflation to the targeted level.
Kenya's inflation dropped to 7.9 percent in June, but it was still above the government's target of 7.5 percent. The high inflation slowed down the country's economic growth in the first quarter to 5.3 percent, down from 6.2 percent in the same period in 2022.
"Maintaining inflation at the targeted rate will help preserve macroeconomic stability and reduce undesirable fluctuations in economic performance," Ndung'u said. ■
