The overall inflation dropped to a 17 months low to stand at 7.74 per cent in July from 10.05 per cent in June 2012, reflecting a 2.31 percentage point drop. The last time inflation stood below the 10 per cent level was in February 2011 when inflation was posted at 6.54 per cent.

In as much as this is not the biggest drop in the month on month inflation, the drop to 7.74 per cent is below Central Bank of Kenya’s target of 9 per cent. As posted in the Business Daily, this drop sets the stage for a further reduction in interest rates to the benefit of consumers and businesses.

A recent World Bank Report projected that inflation will remain below 10 per cent during the second half of 2012. This projection appear to be true as two months into the second half of 2012, inflation stands at 7.74 per cent.

Below is a 12 months trend in rate of inflation as posted by Kenya National Bureau of Statistics.