A chronological analysis of inflation dynamics in Kenya

Abstract

This paper undertakes an exploratory examination of inflation dynamics in Kenya between 1970 and 2021, employing a descriptive research design and secondary data from various sources, coupled with qualitative analysis of the literature. The paper comprehensively analyzes the impact of diverse policy changes, including monetary and fiscal policies. Overall, this paper provides a beneficial resource for anyone interested in comprehending the intricacies of inflation dynamics in Kenya and the relevant measures employed to manage rising prices. The government implemented various measures to fight inflation over the years, including tight monetary policy and fiscal policy measures. The Central Bank of Kenya implemented various monetary policies to control inflation, such as increasing interest rates and tightening credit. Factors such as rising food and fuel prices, droughts, and political instability have driven inflation in Kenya over the years. Despite Kenya's implementation of several reforms aiming to promote stable inflation over time, challenges regarding inflation persist. To achieve long-term economic growth and stability, it may be wise for the government to consider implementing policies that promote fiscal discipline, strengthen institutional frameworks, and encourage private sector development. By doing so, the government can ensure sustainable economic growth and stability.