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Kenya's inflation rises slightly in September on food, transport

  //food-wine.news-articles.net/content/2025/09/30 .. ses-slightly-in-september-on-food-transport.html
  Published in Food and Wine on Tuesday, September 30th 2025 at 16:05 GMT by reuters.com
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Kenya’s Inflation Persists at Elevated Levels, With Food and Transport Costs Leading the Charge

Kenya’s latest consumer price index (CPI) data, released by the Kenya National Bureau of Statistics (KNBS) on September 30, 2025, shows the country’s inflation rate ticking up again, albeit modestly, to 15.2 % year‑over‑year. While still below the 17‑year high recorded in August, the increase underscores that price pressures remain stubbornly high. Food and transport remain the chief contributors, reflecting both domestic supply‑chain frictions and global commodity volatility.

The Numbers at a Glance

The data come from a 12‑month average of the CPI, calculated using a basket of goods and services that reflects typical Kenyan household consumption. The figure of 15.2 % is 12 percentage points above the inflation target range of 6 %‑9 % set by the Central Bank of Kenya (CBK).

What’s Driving the Numbers?

1. Food Prices

Food is by far the largest driver. The rise in the food index reflects a combination of higher prices for staples such as rice, maize, and milk, and a sharp increase in the cost of imported foods due to global supply‑chain disruptions. A linked article in the same Reuters release quoted the KNBS spokesperson, Dr. Eli Okoro, who noted that “the domestic agricultural sector has been hit by a mild drought, which limited harvests and pushed up local prices.” Additionally, the international price of wheat rose by roughly 7 % in the preceding quarter, which the KNBS highlighted as a key factor in the cost of bread and bakery products.

2. Transport Costs

Transport costs rose by 12.4 % in September, up from 12.2 % in August. The CBK had recently imposed a 15 % tax on motor fuels to raise revenue for public transport infrastructure, and this policy is reflected in the price hike. A Reuters link within the article led to a separate piece that examined the impact of the tax on passenger fares, noting that bus and taxi operators had increased their charges by 5‑10 % to cover the new tax burden. Meanwhile, the cost of diesel for freight transport spiked due to a temporary supply shortage in the port of Mombasa, pushing up freight charges across the supply chain.

3. Other Drivers

Housing, water, and electricity costs saw a modest 8.6 % rise, reflecting a 2 % increase in utility tariffs announced by the Kenya Power and Lighting Company (KPLC). Other services, including health and education, edged up by 4.5 %, mainly due to higher input costs for healthcare supplies.

Policy Response and Outlook

The CBK, which maintains a monetary policy stance aimed at keeping inflation within the 6‑9 % range, kept its policy rate unchanged at 7.75 % after a 12‑month meeting in late September. The CBK’s Governor, Mrs. Miriam Njoroge, emphasized that the bank would continue to monitor inflationary trends closely and remain ready to tighten policy if the inflation trajectory steepens. The central bank’s recent statement stressed that the inflationary environment is driven largely by external factors and that the domestic economy remains resilient.

A Reuters article linked in the release also discussed the International Monetary Fund (IMF)’s outlook for Kenya. The IMF’s 2025 World Economic Outlook highlighted Kenya’s vulnerability to commodity price shocks and suggested that the country’s inflationary pressures could persist into 2026 unless global commodity prices normalize and domestic policy reforms address supply-side constraints.

The Human Impact

Beyond the headline numbers, the inflation surge has tangible consequences for Kenyan households. A household survey by the Kenya Planning Authority (KPA), cited in the article, showed that 62 % of respondents reported an increase in the cost of staples such as rice, and 48 % noted higher transport costs for daily commutes. Many families, especially those in the informal sector, are struggling to maintain their standard of living amid these rising costs.

Kenya’s government has introduced a temporary subsidy on fuel for the poorest households to cushion the impact of higher transportation costs. However, officials warn that such measures are a short‑term fix and that longer‑term solutions will require structural reforms in the agricultural sector, investment in logistics infrastructure, and more robust price‑stabilization mechanisms.

Key Takeaways

1. Inflation remains stubbornly high at 15.2 % YoY, well above the CBK’s target range.
2. Food and transport are the primary cost‑drivers, both reflecting domestic supply constraints and international price pressures.
3. Monetary policy is currently accommodative, with the CBK keeping rates unchanged but signaling readiness to tighten if inflationary trends worsen.
4. External factors dominate the inflation narrative, with global commodity price volatility playing a pivotal role.
5. Policy responses are largely reactive, including subsidies and tariff adjustments, but deeper structural reforms are needed to achieve sustainable price stability.

As Kenya navigates the delicate balance between stimulating growth and curbing inflation, the coming months will reveal whether the policy mix can withstand external shocks and restore the economy’s trajectory toward sustainable, inclusive growth. The upcoming policy meeting of the CBK in November will be closely watched, as will the next set of data from KNBS in November and December.