Kenya’s inflation rises to 4.6% in September as economy expands by 5% in Q2

Kenya's inflation rose slightly to 4.6 percent year-on-year in September, up from 4.5 percent in August, the Kenya National Bureau of Statistics (KNBS) has said.

In a Tuesday report, KNBS said month-on-month inflation was at 0.2 percent in September, with the overall Consumer Price Index (CPI) increasing to 146.56 from 146.21 the previous month.

The increase was mainly driven by a rise in prices of food and non-alcoholic drinks (8.4%), transport (4.0%), and housing, water, electricity, gas and other fuels (1.4%), the bureau said.

“These three divisions together account for over 57 per cent of the total weight across the 13 major expenditure categories,” the report added.

The Central Bank of Kenya (CBK) targets year-on-year inflation to remain within the range of 2.5% to 7.5% as its benchmark for its monetary policy decisions, allowing for external and domestic shocks, such as changes in oil prices or weather-related events.

At the same time, the economy grew by 5.0 percent year-on-year in the second quarter of 2025, up from 4.6 percent in the same quarter last year.

KNBS attributed the growth to the agriculture, forestry and fishing (4.4%); transportation and storage (5.4%); and finance and insurance (6.6%) sectors.

It was also supported by rebounds in construction and mining activities that rose by 5.7 and 15.3 per cent, respectively, after contracting in the second quarter of 2024.

“Electricity and water supply activities also recorded improved performance in the quarter under review, posting a growth of 5.7 per cent compared to 1.2 per cent growth in the second quarter of 2024,” the statistics office said.

Meanwhile, during the quarter, the Kenyan Shilling strengthened against the US Dollar by 1.2 percent and weakened against other major international currencies, including the Japanese Yen, the Pound Sterling, and the Euro, by 6.5 percent, 4.5 percent, and 4.0 percent, respectively.

Regionally, it weakened against the Ugandan Shilling by 2.7 percent but appreciated against the Tanzanian Shilling.

In August, President William Ruto said Kenya’s economy was forecast to grow 5.6 per cent this year, up from 4.7 percent last year.

This was higher than growth forecasts by the National Treasury and CBK of 5.3 percent and 5.2 percent, respectively.