July witnessed a surge in inflation due to increased costs for food and energy, according to the Kenya National Bureau of Statistics (KNBS).
In July 2025, Kenya's annual inflation rate rose to 4.1%, according to the Kenya National Bureau of Statistics (KNBS). This increase is attributed to a rise in prices of commodities over the last 12 months.
The hike in prices is particularly noticeable in the housing, utilities, and fuel sectors. Kerosene prices, for instance, saw a significant surge, adding significant pressure on overall living costs. Fluctuating food prices also remain a major component of Kenya's consumer price index and heavily influence inflation.
Among the products with increased prices in July 2025 are Maize Grain (1 Kg), Maize Flour (1 Kg), Onions (1 Kg), Tomatoes (1 Kg), Sukuma Wiki (1 Kg), Beef (1 Kg), and Sugar (1 Kg). The cost of housing, water, electricity, gas, and other fuel products also surged by 1.3%.
However, there are some exceptions. Prices of Oranges (1 Kg) decreased by 2.6%, Potatoes (1 Kg) by 2.0%, Beans (1 Kg) by 0.5%, and Fresh Packeted Cow Milk (500 ml) by 0.2% over the last one month. The cost of a liter of cooking oil declined by 0.6% and the cost of electricity (200 Kilowatts) decreased by -1.4%.
The transport index also increased by 4.1% during the same period. Cooking Gas/LPG (13 Kg) prices increased by 0.4%, while Kerosene/Paraffin (1 Liter) prices increased by 0.6%.
The overall year-on-year (annual) inflation rate, as measured by the Consumer Price Index (CPI), was 4.1% in July 2025. The Overall Consumer Price Index increased from 139.94 in July last year to 145.74 in July 2025.
Alcoholic Beverages, Tobacco, and Narcotics recorded an inflation of 5.1% in July 2025. Monthly House Rent - Single Room prices increased by 6.7%.
While the inflation rate decreased from 4.6% in June to 4.1% in July 2025, the persistent increase in essential commodity prices keeps inflation elevated and impacts the cost of living. The month-to-month inflation increase of 0.1% also indicates steady pressure on prices.
Underlying macroeconomic elements such as a weakening Kenyan shilling driven by demand for foreign currency due to import reliance and a widening current account deficit, which raises import costs and fuels inflation, are expected to continue putting upward pressure on prices. Additionally, continued high public debt and borrowing for infrastructure and social projects contribute indirectly by affecting fiscal and monetary dynamics relevant to inflation.
Despite these challenges, the Kenyan government continues to work towards stabilising the economy and managing inflation to ensure a sustainable and affordable cost of living for its citizens.
The increase in essential commodity prices, as seen in items like Maize Grain, Beef, Sugar, and Kerosene, indicates a significant influence on Kenya's business sector and finance, potentially impacting the cost of living for citizens. On the other hand, fluctuations in product prices such as Oranges, Potatoes, and Fresh Packeted Cow Milk exhibit a contrasting picture, providing some relief to the overall inflation rate in finance and business.
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