Banking & Finance
Kenya’s Inflation Hits 3-Month High in July
Household utility costs spiked sharply in July, contributing to the three-month inflation peak, KNBS data reveals.
Kenya’s inflation climbed to 4.1% in July 2025, driven by rising food, fuel, and utility prices, according to new KNBS data.
Kenya’s annual inflation rate rose to a three-month high of 4.1% in July 2025, up from 3.8% in June, driven by rising food, transport, and utility costs, according to data from the Kenya National Bureau of Statistics (KNBS).
This matches the inflation level last recorded in April 2025, signaling renewed pressure on consumer prices amid shifting economic trends.
“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,” KNBS stated in its monthly CPI bulletin.
The rise in inflation was broad-based. Key drivers included food and non-alcoholic beverages, which carry the largest weight in the inflation basket. Annual food inflation ticked up to 6.8% in July, from 6.6% in June.
Transport inflation saw an even sharper jump, climbing from 3.3% to 4.1%, largely attributed to fuel price adjustments.
Household utility prices also surged. The housing, water, electricity, gas, and fuels category rose from 0.2% in June to 1.3% in July, reflecting higher energy and water bills.
Month-on-month inflation eased to 0.1%, down from 0.5% in June, offering slight relief to consumers.
Despite recent volatility, headline inflation has remained within the Central Bank of Kenya’s (CBK) target range of 2.5% to 7.5% throughout 2025.
The July inflation report comes just weeks after the CBK announced a 25-basis-point interest rate cut in June, lowering the benchmark lending rate to 9.75% to stimulate private sector lending.
However, the Bank has trimmed its 2025 GDP growth forecast to 5.2%, down from 5.4%, citing the effects of rising global trade tariffs.