The cost of living in Kenya continues to rise, with the latest data from the Consumer Price Index (CPI) showing an annual inflation rate of 3.6% in March 2025. This increase indicates that the general price level in March 2025 was 3.6% higher compared to the same month in 2024, driven primarily by the surge in food and transportation costs.
According to the report, the Food and Non-Alcoholic Beverages category recorded the highest increase, with prices rising by 6.6% over the past year. This surge has been attributed to various factors, including supply chain disruptions, fluctuating fuel prices, and erratic weather patterns affecting agricultural production. Staple foods such as maize flour, rice, cooking oil, and vegetables have seen notable price hikes, straining household budgets across the country.
In addition to food prices, the Transport category also contributed significantly to the overall inflation rate, registering a 1.5% increase. The rise in fuel costs, which has a direct impact on transport fares and goods transportation, has been a major factor behind this uptick. Higher fuel prices often translate to increased operational costs for businesses, ultimately leading to higher prices for consumers.
On the other hand, the Housing, Water, Electricity, Gas, and Other Fuels category provided some relief, with a 0.8% decline in prices over the same period. This decrease has been linked to government subsidies and reduced energy costs in some areas, offsetting inflationary pressures in other sectors.
The combined impact of these three divisions Food and Non-Alcoholic Beverages, Transport, and Housing plays a crucial role in shaping inflation trends, as they collectively account for over 57% of total household expenditures across the 13 major expenditure categories.
Economists warn that unless measures are taken to stabilize food production and fuel prices, inflation could continue to rise in the coming months, affecting purchasing power and overall economic stability. The government is expected to introduce policies aimed at mitigating these price pressures, including subsidies and incentives for farmers, as well as reviewing fuel taxation policies.
As consumers grapple with higher costs, policymakers will need to implement strategic interventions to cushion households from further economic strain while ensuring sustainable growth in key sectors.
