Kenya’s Annual Inflation Decelerates 

(Bloomberg) -- Kenyan inflation decelerated in May as the onset of delayed rains improved food prices in East Africa’s biggest economy.

The annual inflation rate dropped to 5.5% from 6.6% in April after the food and non-alcoholic beverages index fell 0.37%, the Kenya National Bureau of Statistics said Friday in an emailed statement. Prices declined 0.1% in the month.

Key Insights:

• The inflation rate rose to a 19-month high in April as food and transport prices surged.
• While the onset of delayed rains should help in the coming months to partly reverse the climb in food costs, rising fuel prices and adverse base effects from last year will underpin inflation in the second and third quarter, according to Bloomberg Economics, which now sees a breach of the central bank’s 7.5% target ceiling as a distinct possibility.
• The state will allow large-scale grain millers to import corn duty-free from neighboring nations to boost supply of the staple.

To contact the reporter on this story: David Herbling in Nairobi at dherbling@bloomberg.net

To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Helen Nyambura

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