CBK Inflation Forecasts Struggle to Keep Pace with Price Shocks

The Central Bank of Kenya’s inflation forecasts have diverged from actual consumer-price movements as fuel prices remain higher for longer than expected. New supply shocks, including an ongoing milk scarcity, have also upset the monetary authority’s expectations. A comparison of CBK forecasts with consumer price index data from the Kenya National Bureau of Statistics found deviations in four of the past six months.