Kenya’s annual inflation accelerated to 6.8% in September 2026, from 6.6% in August, as higher food and transport costs strained household budgets. The Central Bank of Kenya’s (CBK) September Market Perceptions Survey found that banks and businesses expect inflation to remain somewhat elevated through November, mainly because of fuel prices, food supply difficulties and international uncertainty. However, respondents still expect inflation to remain within the country’s target range.
Key Overview
- Headline inflation: Rose to 6.8% in September from 6.6% in August 2026.
- Food prices: Food and non-alcoholic beverages recorded annual inflation of 9.5%.
- Transport costs: Transport inflation reached 15.6% year on year.
- Near-term outlook: Survey respondents expect continued price pressure from food supply constraints, fuel costs and global disruptions.
- Possible relief: Improved harvests, a stable shilling and steady monetary policy could moderate inflation.
Food and Transport Push Kenya’s Inflation Higher
The September consumer price report shows that headline inflation climbed to 6.8%, meaning the average consumer basket cost 6.8% more than a year earlier. Prices rose 0.4% between August and September alone.
Food and non-alcoholic beverage prices increased 9.5% year on year, while transport prices climbed 15.6%. Housing, water, electricity, gas and other fuels recorded a 3.2% annual increase. Together, these categories account for more than 57% of the inflation basket’s weighting, making their movements particularly important for overall inflation.
The rise from August’s 6.6% inflation rate indicates that household budgets continued to face pressure. Importantly, a slower inflation rate would mean prices are increasing less quickly, not necessarily that the overall cost of living has fallen.
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Fuel Prices Threaten Transport and Business Costs
According to the September Market Perceptions Survey, respondents anticipate somewhat elevated inflation through November due to fuel and transport expenses, food shortages and global shocks.
Higher fuel costs affect much more than petrol purchases. They raise the cost of moving crops from farms to markets, transporting manufactured goods and operating businesses that depend on diesel-powered equipment or long-distance deliveries. Companies may absorb some increases, but persistent higher costs can eventually feed through into consumer prices.
The survey also identifies international oil-price volatility and geopolitical tensions as risks to imported inflation. Because Kenya relies on imported petroleum products, a rise in global oil prices can increase domestic costs even when the shilling remains stable.
Weather and Harvests Will Shape Food Prices
Food supply remains another major uncertainty. The central bank’s agriculture survey points to higher fuel costs as a source of price pressure but also highlights possible relief from better-than-average rainfall during the October–December short-rains season.
Weak harvests during the long-rains period and difficulties transporting produce can limit food availability and raise retail prices. Conversely, better harvests and improved storage facilities could increase supply and slow food-price inflation.
The outlook depends on rainfall patterns, farm output and distribution conditions. Above-average rainfall may support crops, but severe weather and flooding could also disrupt production or transport.
Stable Shilling May Help Contain Inflation
Survey respondents expect exchange-rate stability and prudent monetary policy to help keep inflation near the midpoint of Kenya’s 5% ± 2.5 percentage-point target range over the medium term. They also anticipate broadly stable lending rates, although inflation and global uncertainty could change that outlook.
The official survey findings reflect expectations rather than guaranteed outcomes. For households and businesses, the critical developments through the end of 2026 will be fuel prices, short-rains harvests, food distribution and the shilling’s stability.
Sources: Central Bank of Kenya / Kenya National Bureau of Statistics / Business Today
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