NAIROBI, Kenya, Sep 11 – Centum Investment expects Kenya’s inflation to peak at seven percent in the fourth quarter of 2027 if the Strait of Hormuz remains partially open and Brent crude trades between $85 and $100 a barrel.
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.
“First, oil is the swing factor. Our base case (50% probability) is an uneasy equilibrium in which Hormuz stays partially open and Brent trades between USD85 and USD100. Headline inflation peaks near 7.0% in the fourth quarter but remains inside the 2.5% to 7.5% band,” Centum said.
The projection comes after Kenya’s annual inflation rate rose slightly to 6.6 percent in August from 6.5 percent in July, driven mainly by higher transport and food prices, according to the Kenya National Bureau of Statistics (KNBS).
Earlier, CBK Governor Kamau Thugge revised down the projected inflation peak to 6.8 percent in January 2027 from an earlier forecast of 7.2 percent.
Centum expects the CBK to maintain the Central Bank Rate (CBR) at 8.75 percent through December, with the first 25-basis-point cut coming in the first quarter of 2027.
At the post-Monetary Policy Committee meeting last month, Thugge said the decision to maintain the lending rate was supported by stability in the foreign exchange market and inflation remaining within the target range.
“CBK holds at 8.75% through December with a first 25 basis point cut plausible only in the first quarter of 2027, a more conservative path than the 8.00% to 8.25% we envisaged in June,” Centum said.
