Kenya’s annual inflation rate climbed for the third consecutive month in August 2025, reaching 4.5 percent, up from 4.1 percent in July, according to the latest figures from the Kenya National Bureau of Statistics (KNBS). This marks the highest reading since June 2024 and reflects persistent upward pressure on the cost of living, particularly in food and transport.
The Food and Non-Alcoholic Beverages Index recorded an 8.3 percent year-on-year increase, underscoring the impact of rising prices for key staples. Tomatoes surged by 38.3 percent, carrots by 24.3 percent, and fortified maize flour by 18.7 percent. Other notable increases included sukuma wiki at 17 percent, cabbages at 14.9 percent, and loose maize flour at 13.4 percent. KNBS attributed these price hikes to seasonal supply constraints and higher input costs, which have been exacerbated by erratic weather patterns in major food-producing regions.
The Transport Index rose 4.4 percent over the year, despite a marginal drop in petrol prices from KES 186.67 in July to KES 185.00 in August. The decline in pump prices was offset by sharp increases in passenger transport fares. Long-distance bus fares, such as the Mombasa–Nairobi route, jumped 15.4 percent, while local tuk-tuk fares rose 1.5 percent. KNBS noted that higher operational costs, including vehicle maintenance and spare parts, have contributed to the fare hikes.
The Housing, Water, Electricity, Gas and Other Fuels Index edged up 0.8 percent year-on-year. Electricity charges eased slightly, with the cost of 50kWh falling by 2.3 percent and 200kWh by 2.1 percent, largely due to lower fuel cost charges. However, LPG prices increased by 0.4 percent, and single-room rents rose marginally by 0.1 percent.
Collectively, these three categories—food and non-alcoholic beverages, transport, and housing/utilities—account for over 57 percent of the total weight in the Consumer Price Index basket, making them the primary drivers of overall inflation.
On a month-to-month basis, the overall CPI rose from 145.74 in July to 146.21 in August, translating to a 0.3 percent monthly inflation rate, compared to 0.1 percent in July. KNBS highlighted that while some household goods and services saw price declines, the increases in essential categories outweighed these reductions.
CBK Comfortable with Current Inflation Numbers.
The Central Bank of Kenya (CBK) maintained that inflation remains comfortably within its medium-term target range of 2.5 to 7.5 percent. This outlook supported the CBK’s decision earlier in August to cut the benchmark lending rate by 350 basis points to 9.50 percent, citing room for further monetary easing should price stability persist. The bank noted that the current inflation trajectory, coupled with a stable shilling and improving food supply prospects, provides a conducive environment for supporting economic growth through accommodative monetary policy.
Economists, however, caution that inflationary pressures could intensify in the coming months if global oil prices rise or if adverse weather disrupts agricultural production. They also point to the potential impact of fiscal measures, such as adjustments in taxation or subsidies, on consumer prices.
Also Read: July Inflation Rate Rises To 4.1%, a 3 Month High.
