East Africa’s economic landscape presented a mixed picture in October 2024, with local currencies largely under pressure and inflation trends diverging across the region, according to the Finance Ministry’s report for the state of the economy of October 2024
Most East African Community (EAC) currencies leaned toward depreciation.
The Tanzanian Shilling fell by 0.8%, while the Rwandan and Burundian Francs weakened by 1.0% and 0.2%, respectively. Bucking the trend, the Kenyan Shilling remained stable, holding steady at an average midrate of KShs/USD 129.2 for both September and October.
On the inflation front, a downward trend in annual headline inflation was observed across several EAC economies.
Kenya and Tanzania recorded declines, with inflation rates easing to 2.7% and 3.0%, down from 3.6% and 3.1% in the previous month, respectively.
Similarly, Somalia’s inflation rate fell from 5.9% to 5.3%, while the Democratic Republic of Congo (DRC) saw inflation drop from 22.2% to 16.4% over the same period.
However, the situation wasn’t uniform across the region. Burundi experienced a sharp inflation spike, climbing from 18.2% in August to 23.3% in September.
South Sudan faced the most severe challenge, with its annual inflation soaring from 97.3% in June to an alarming 107.3% in July 2024.
The report underscores the persistent economic challenges in the EAC, including currency vulnerabilities and inflation volatility.
While some countries benefited from eased inflation pressures, others remain burdened by surging costs, exacerbated by supply chain disruptions and local economic constraints.
Regional policymakers will need to strike a delicate balance between addressing currency depreciation and maintaining inflationary stability to sustain economic growth across the bloc.