Nothing but garbage from Business Daily....ask @mainat he will tell you what type of inflation we have here...also try googling MV=PT...Stimulus/Quantitative easing...Balance of payments and link the two to currency depreciation..also google Mr Vockler...stagflation is different from an economic slow down/recession...Studying the U.S and Zimbabwe will also help.

I think the Govy has done alot as far as fiscal policy is concerned, to compliment our prof at the onetary policy wing.
The big problem with KE at the moment is the unfavourable bop,the widening current account deficit.
Can u imagine just last year, we only exported a paltry KES400B yet had the audacity to import KES 900B.
This is where we need to start!

I actually agree with you what the govt is doing will create one hell of a recession that might create an uprising.

The economy is decelerating, now couple that with increased rates how does the govt intend to stimulate the economy if getting the money to expand businesses is getting so damn expensive.

I have a guy who used to pay 200K a month in loan installments he runs a tourist spot..now he confided in me the installments have shot up to 350k a month now he doesnt know what will happen once the bank adjust in view of the current CBR hike.

With the alshabab war in progress this guy is screwed since tourist numbers might be affected due to travel advisories being issued.

The governor is punishing the whole country for mistakes of the treasury now imagine duty free import of maize has been extended even though we are harvesting.Treasury should come up with a tax regime that discourage importation of non essential items that can be manufactured locally another thing is negotiating for better oil prices with producers to curb imported inflation.

Any student of economics would know that these mens theories only hold in DEVELOPED ECONOMIES..

Who wants to take a bet on this:

Inflation will start declining as early as December 2011 and will reduce to a single digit by December 2012.

I know many of you will claim that it will happen because of factors other than CBK's actions, but methinks it will because of a combination of monetary and fiscal policy as well as Acts of God.

Of course, I accept politics could mess up my scenario above, but I am willing to place the bet, the risk notwithstanding.