The World Bank reported that Kenya’s annual inflation rate increased to 7.3 percent in October 2026, up from 4.6 percent recorded in 2025.

The lender linked the rise primarily to higher fuel prices and weather‑related disruptions to food supplies, which pushed up the cost of essential commodities.

Energy‑related inflation, covering housing, water, electricity, gas, other fuels and transport, surged to 10.4 percent in October 2026, compared with 3.4 percent a year earlier.

The World Bank attributed the sharp energy‑inflation increase to higher global oil prices and elevated fuel import costs amid supply disruptions and heightened geopolitical tensions from the Middle East conflict.

Energy‑related components now account for 36.2 percent of headline inflation, nearly double their share of 18.7 percent a year earlier.

Food inflation also rose, reaching 10.2 percent in October 2026 from 8.0 percent in 2025, driven by weather‑related supply constraints and higher transportation costs linked to fuel price hikes.

Core inflation, which excludes food and energy, recorded a modest increase to 2.5 percent in October 2026, suggesting subdued domestic demand and limited broader inflationary pressure.

Despite the rise, the World Bank noted that overall inflation remains within the Central Bank of Kenya’s target range of 2.5 to 7.5 percent.

Broader economic backdrop

Private‑sector credit growth accelerated to 10.6 percent in September 2026, a marked improvement from the 5.0 percent recorded the previous year, with strong gains in mining, agriculture, finance and trade.

The report also highlighted a potential cost saving of roughly KSh116 billion (US$900 million) on the Standard Gauge Railway’s initial construction if Kenya had matched Tanzania’s lower per‑kilometre costs.