Total Imports and Its Components Influence on Inflation in Kenya
Evans Ovamba Kiganda, Margaret Atieno Omondi
Journal of Economics, Management and Trade · pp. 54–62 · Published 30 Nov 2020
10.9734/jemt/2020/v26i930291Abstract
Aim: The purpose of this study was to analyze the influence of total imports (TIMP) and its components of commercial imports (CIMP) and government imports (GIMP) on inflation in Kenya. Study Design: Quantitative approach was employed to analyze the influence of imports on inflation in Kenya. Methodology: Monthly time series data from Central Bank of Kenya for the period 2005 to 2018 was used for analysis involving correlation analysis, variance decomposition, impulse response and Granger causality tests. Results: Results indicated that total imports and commercial imports had negative influence on inflation while government imports did not significantly influence inflation in Kenya. Unidirectional causality from total imports and commercial imports to inflation was noted while there was no causality between government imports and inflation. Conclusion: The study concluded that imports influence inflation in Kenya but commercial imports highly determined total imports influence on inflation in Kenya.
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