Browsing: global economic shocks

• Kenya’s high-interest rates hit 13 per cent in the last review by the Central Bank of Kenya.
• Since mid-2023, however, the World Bank’s index of commodity prices has remained essentially unchanged.
• World Bank reiterates that between mid-2022 and mid-2023, global commodity prices plummeted by nearly 40 per cent.

Kenyan consumers will have to bear the high cost of borrowing for much longer as Central Banks will not loosen their monetary policies any time soon, the World Bank has said.

The lender says the continued tightening will be a result of the prevalent global economic shocks, such as the Middle East conflict, which is threatening to halt the inflationary decline that has occurred in the past two years.

“Global commodity prices are leveling off after a steep descent that played a decisive role in whittling down overall inflation last year,” the World Bank says in its latest commodity markets outlook. “However,

xternal and domestic economic shocks disrupted Sierra Leone’s post-pandemic recovery, exacerbating existing macro-fiscal vulnerabilities and plunging Sierra Leone into a severe economic crisis. In Sierra Leone’s presidential poll today, the citizens will look to choose the best promise for an economic rebuild.…

Some worry that monetary policy is still excessively accommodating, given that rate hikes have not matched inflation. Policy cooperation may be beneficial. Fiscal consolidation and a mix of rate rises and currency depreciation may play a role in nations where policy is overly permissive.

The shaky recovery in Sub-Saharan Africa, coupled with domestic demand constraints, has not significantly fueled inflation so far. However, in the coming months, governments and policymakers must carefully monitor and prioritise tackling the rising inflation in Africa.…