Kenya’s annual inflation rate climbed to a three-month high of 4.1% in July, up from 3.8% in June, driven by rising costs of food, transport, and utilities, according to new data from the country’s National Bureau of Statistics (KNBS).
This marks the second time in 2025 that inflation has reached this level, matching the 4.1% recorded in April, signaling renewed pressure on consumer prices.
“Overall year-on-year (annual) inflation rate as measured by the Consumer Price Index (CPI) was 4.1% in July 2025; an increase from an inflation rate of 3.8% recorded in the previous month,” the statistics bureau said in its monthly CPI report released on Thursday.
The July increase was broad-based. Further analysis of the report shows that food and non-alcoholic beverages, which carry the largest weight in the inflation basket, saw a slight rise in prices, with annual food inflation rising from 6.6% in June to 6.8% in July.
Transport inflation rose more sharply, jumping to 4.1% from 3.3%, partly due to fuel price movements. Meanwhile, prices in the housing, water, electricity, gas, and other fuels category surged to 1.3% from 0.2% in June, reflecting a notable increase in household utility costs.
Month-on-month inflation slowed to 0.1%, down from 0.5% in the previous month.
After rising steadily from January to April, inflation in Kenya has become less predictable, with fluctuations in recent months. Despite the recent volatility, headline inflation has remained comfortably within the Central Bank of Kenya’s 2.5% to 7.5% target band throughout the year.
The latest inflation reading follows the central bank’s 25-basis-point rate cut in June, lowering the benchmark interest rate to 9.75%. The apex bank said that the cut would further stimulate private sector lending and boost economic activity.
The Bank has, however, revised its 2025 GDP growth forecast down to 5.2% from 5.4% previously, citing the effects of rising global tariffs.
With the next policy meeting scheduled for August 12, analysts are watching closely to see whether policymakers will hold rates steady in the face of rising inflation or shift focus back to price stability.
