Kenya Inflation Rate

Inflation rate (12-month inflation rate) refers to the percentage change in the general price level of goods and services over a specified period, typically measured annually.

This rate is commonly calculated using the Consumer Price Index (CPI), which tracks the average price increase of a basket of selected goods and services.

Inflation can be classified into different types such as:

• Demand-pull inflation
• Cost-push inflation, and
• Built-in inflation.

The rate of inflation reflects how quickly prices are rising, with high inflation indicating rapid price increases and low inflation indicating slower price growth.

Inflation impacts the cost of living, diminishing the purchasing power of currency and affecting consumer behavior, economic growth, and monetary policy decisions.

Inflation in figures

The inflation rate in Kenya has been steadily declining in recent months, reaching a 3-1/2-year low of 5% in April 2024. This is down from 5.7% in March and 6.3% in February.

The main drivers of the lower inflation rate are:

• Easing prices of food and non-alcoholic beverages, which make up one-third of the inflation basket. Food inflation slowed to 5.6% in April from 5.8% in March.
• Slower price growth for housing & utilities, primarily electricity, as the country’s main dams are overflowing due to recent heavy rains that the country is experiencing.
• Easing transportation costs, with gasoline prices cut by nearly 3% in mid-April.

The Kenyan shilling has also appreciated by nearly 19% recently, helping to further slow inflation.

Looking ahead, the inflation rate is expected to continue declining, with Trading Economics forecasting 4.5% by the end of Q2 2024 and around 4.3-4.7% in 2025 – 2026.

Kenya inflation rates table

Learn more about Inflation Rates

Year	Month	Annual Average Inflation	12-Month Inflation
2024	April	6.73	5
2024	March	6.97	5.7
2024	February	7.26	6.31
2024	January	7.5	6.85
2023	December	7.67	6.63
2023	November	7.87	6.8
2023	October	8.1	6.92
2023	September	8.32	6.78
2023	August	8.52	6.73
2023	July	8.68	7.28
2023	June	8.77	7.88
2023	May	8.78	8.03
2023	April	8.71	7.9
2023	March	8.59	9.19
2023	February	8.3	9.23
2023	January	7.95	8.98
2022	December	7.66	9.06
2022	November	7.38	9.48
2022	October	7.48	9.59
2022	September	6.81	9.18
2022	August	6.61	8.53
2022	July	6.45	8.32
2022	June	6.29	7.91
2022	May	6.16	7.08
2022	April	6.05	6.47
2022	March	6.29	5.56
2022	February	6.23	5.08
2022	January	6.08	5.39
2021	December	5.62	5.73
2021	November	6.1	5.8
2021	October	6.07	6.45
2021	September	5.35	6.91
2021	August	5.71	6.57
2021	July	5.53	6.55
2021	June	5.35	6.32
2021	May	5.2	5.87
2021	April	4.66	5.76
2021	March	5.17	5.9
2021	February	5.16	5.78
2021	January	5.74	5.69
2020	December	5.41	5.62
2020	November	5.53	5.33
2020	October	5.67	4.84
2020	September	5.79	4.2
2020	August	5.87	4.36
2020	July	6.01	4.36
2020	June	6.16	4.59
2020	May	6.18	5.33
2020	April	6.03	6.01
2020	March	5.84	5.84
2020	February	5.72	7.17
2020	January	5.29	5.78
2019	December	5.2	5.82
2019	November	5.19	5.56
2019	October	5.19	4.95
2019	September	5.24	3.83
2019	August	5.4	5
2019	July	5.32	6.27
2019	June	5.16	5.7
2019	May	5.04	4.49
2019	April	4.91	6.58
2019	April	4.91	6.58
2019	March	4.67	4.35
2019	February	4.65	4.14
2019	January	4.68	4.7
2018	December	4.69	5.71
2018	November	4.59	5.58
2018	October	4.53	5.53
2018	September	4.53	5.7
2018	August	4.63	4.04
2018	July	4.95	4.35
2018	June	5.2	4.28
2018	May	5.61	3.95
2018	April	6.24	3.73
2018	March	6.89	4.18
2018	February	7.4	4.46
2018	January	7.79	4.83
2017	December	7.98	4.5
2017	November	8.15	4.73
2017	October	8.33	5.72
2017	September	8.4	7.06
2017	August	8.36	8.04
2017	July	8.21	7.47
2017	June	8.13	9.21
2017	May	7.84	11.7
2017	April	7.2	11.48
2017	March	6.76	10.28
2017	February	6.43	9.04
2017	January	6.26	6.99
2016	December	6.3	6.35
2016	November	6.43	6.68
2016	October	6.48	6.47
2016	September	6.5	6.34
2016	August	6.47	6.26
2016	July	6.44	6.4
2016	June	6.46	5.8
2016	May	6.59	5
2016	April	6.72	5.27
2016	March	6.88	6.45
2016	February	6.87	6.84
2016	January	6.77	7.78
2015	December	6.58	8.01
2015	November	6.42	7.32
2015	October	6.31	6.72
2015	September	6.29	5.97
2015	August	6.34	5.84
2015	July	6.54	6.62
2015	June	6.63	7.03
2015	May	6.65	6.87
2015	April	6.69	7.08
2015	March	6.63	6.31
2015	February	6.63	5.61
2015	January	6.74	5.53
2014	December	6.88	6.02
2014	November	6.97	6.09
2014	October	7.08	6.43
2014	September	7.19	6.6
2014	August	7.33	8.36
2014	July	7.19	7.67
2014	June	7.05	7.39
2014	May	6.85	7.3
2014	April	6.58	6.41
2014	March	6.39	6.27
2014	February	6.21	6.86
2014	January	6.01	7.21
2013	December	5.72	7.15
2013	November	5.39	7.36
2013	October	5.05	7.76
2013	September	4.75	8.29
2013	August	4.5	6.67
2013	July	4.44	6.03
2013	June	4.56	4.91
2013	May	4.96	4.05
2013	April	5.61	4.14
2013	March	6.33	4.11
2013	February	7.24	4.45
2013	January	8.2	3.67
2012	December	9.38	3.2
2012	November	10.67	3.25
2012	October	12.04	4.14
2012	September	13.29	5.32
2012	August	14.33	6.09
2012	July	15.27	7.74
2012	June	15.97	10.05
2012	May	16.4	12.22
2012	April	16.5	13.06
2012	March	16.45	15.61
2012	February	15.93	16.69
2012	January	15.1	18.31
2011	December	14.02	18.93
2011	November	12.82	19.72
2011	October	11.49	18.91
2011	September	10.18	17.32
2011	August	9	16.67
2011	July	7.88	15.53
2011	June	6.88	14.48
2011	May	5.96	12.95
2011	April	5.2	12.05
2011	March	4.49	9.19
2011	February	4.05	6.54
2011	January	3.93	5.42
2010	December	3.96	4.51
2010	November	4.02	3.84
2010	October	4.12	3.18
2010	September	4.4	3.21
2010	August	4.69	3.22
2010	July	5.03	3.57
2010	June	5.43	3.49
2010	May	5.85	3.88
2010	April	6.32	3.66
2010	March	7.03	3.97
2010	February	7.88	5.18
2010	January	8.64	5.95
2009	December	9.24	5.32
2009	November	10.24	5
2009	October	11.42	6.62
2009	September	12.41	6.74
2009	August	13.42	7.36
2009	July	14.35	8.44
2009	June	15.11	8.6
2009	May	15.93	9.61
2009	April	16.72	12.42
2009	March	17.07	14.6
2009	February	16.87	14.69
2009	January	16.56	13.22
2008	December	16.27	17.83
2008	November	15.25	19.54
2008	October	14.13	18.74
2008	September	13.02	18.73
2008	August	11.92	18.33
2008	July	10.83	17.12
2008	June	9.86	17.87
2008	May	8.7	18.61
2008	April	7.32	16.12
2008	March	6.13	11.9
2008	February	5.32	10.58
2008	January	4.69	9.4
2007	December	4.27	5.7
2007	November	4.45	6.08
2007	October	4.48	5.38
2007	September	4.57	5.53
2007	August	4.6	5.3
2007	July	4.57	5.48
2007	June	4.46	4.07
2007	May	4.47	1.96
2007	April	4.69	1.85
2007	March	4.99	2.19
2007	February	5.55	3.02
2007	January	6.08	4.63
2006	December	6.39	7.98
2006	November	6.12	6.64
2006	October	5.94	6.55
2006	September	5.7	5.93
2006	August	5.57	4.92
2006	July	5.73	4.16
2006	June	6.33	4.28
2006	May	6.95	4.47
2006	April	7.77	5.44
2006	March	8.61	8.85
2006	February	9.01	9.39
2006	January	9.36	8.39
2005	December	9.87	4.7
2005	November	10.89	4.4
2005	October	11.99	3.72
2005	September	13.24	4.27
2005	August	14.53	6.87
2005	July	15.34	11.76
2005	June	15.1	11.92
2005	May	14.61	14.78
2005	April	13.76	16.02
2005	March	13.07	14.15
2005	February	12.6	13.94
2005	January	12.27	14.87

Inflation and investing

Inflation can have a significant impact on investing in any country, including Kenya.

When considering investment decisions in an inflationary environment, it’s important to understand how inflation affects different asset classes and investment strategies.

1. Real Estate: Historically, real estate is considered a good hedge against inflation. This is because property values and rental income tend to increase with inflation.
2. Equities: Investing in stocks is another way to potentially outpace inflation. Companies that have the ability to pass on increased costs to consumers can maintain or grow their profits even when inflation is high. Therefore, equities in such companies can be a good investment during times of rising inflation.
3. Government Bonds and Fixed Income: Fixed-income investments like bonds can be negatively impacted by inflation. This is because the fixed interest payments of bonds lose purchasing power as inflation rises. However, some countries issue inflation-linked bondsInflation-linked bonds are fixed-income securities whose principal and interest payments are adjusted for inflation. These bonds are issued by governm... ..., which adjust the interest payments based on inflation rates.
4. Diversification: To cope with inflation, investors often diversify their portfolios across a variety of asset classes. This can help balance the effects of inflation on the overall portfolio, as not all assets will react to inflation in the same way.
5. Currency Impact: For foreign investors, the local currency’s strength is a consideration. If the Kenyan shilling depreciates due to inflation, this can erode foreign investment returns when converted back to the investor’s home currency.
6. Sector-Specific Investments: Certain sectors may perform better during periods of high inflation. For instance, sectors like energy and commodities often benefit from inflation because their underlying products increase in price.
7. Interest Rates: Central banks, including the Central Bank of Kenya, may raise interest rates to combat high inflation. Higher interest rates can lead to higher yields on savings and fixed-income investments, but they can also slow down economic growth and reduce corporate profitability, impacting stock prices.
8. Inflation expectations: The expectations of future inflation can also influence investment decisions. If investors expect inflation to rise, they may seek assets that typically perform well during inflationary periods.

So, when investing in an inflationary environment, it’s crucial to consider the nature of inflation, the economic context, and the specific attributes of the investment vehicle.

Inflation can erode purchasing power, so you should seek investments that have the potential to offer returns above the inflation rate.