February 2025 reveals a slight increase in the annual consumer price inflation, as measured by the Consumer Price Index (CPI). The latest figures indicate a 3.5% inflation rate, a modest rise from the 3.3% recorded in January 2025. This signifies that, on average, the cost of goods and services is 3.5% higher than it was in February 2024.

Key Drivers of Inflation:

The primary forces behind this increase are the rising prices in two crucial categories:

• Food and Non-Alcoholic Beverages (6.4%): This sector experienced a significant surge, reflecting increased costs for essential food items.
• Transport (0.7%): While a smaller increase, the transport sector also contributed to the overall rise.

Conversely, the Housing, Water, Electricity, Gas, and Other Fuels category witnessed a 0.8% decline, providing some relief to consumers. However, it's crucial to acknowledge that these three categories collectively represent over 57% of the total weight in the CPI's 13 major expenditure divisions, making them pivotal in determining overall inflation.

Detailed Insights from the Data:

• The overall CPI increased from 142.68 in January 2025 to 143.12 in February 2025, resulting in a monthly inflation rate of 0.3%.
• Within the Food and Non-Alcoholic Beverages sector, notable price increases were observed for sugar (3.2%), cooking oil (salad) (1.6%), and tomatoes (1.3%). Conversely, wheat flour-white and potatoes (Irish) saw price reductions of 2.4% and 1.8%, respectively.
• The Housing, Water, Electricity, Gas, and Other Fuels Index showed a slight increase of 0.1% driven by a 0.6% increase in LPG gas, while electricity prices decreased.
• The Transport Index rose 0.1% due mainly to a 4.8% rise in local flight prices. Petrol and diesel prices remained stable.
• Core inflation, which excludes volatile items, stood at 2.0%, while non-core inflation reached 8.2%.
• Food and non-alcoholic beverages contributed 1.6 points to the non core inflation.

Understanding the CPI:

The CPI serves as a key economic indicator, tracking the cost of a fixed basket of goods and services representative of household spending. This data is collected through monthly surveys across urban areas in 50 data collection zones, comparing current prices to a base period (February 2019).

What This Means for Consumers:

The slight increase in inflation indicates that purchasing power may be marginally reduced. Consumers may need to adjust their budgets to accommodate rising food and transport costs. The decline in housing related costs provides a small offset to the rising food costs.

Looking Ahead:

Monitoring these trends is crucial for policymakers and consumers alike. Future economic conditions and potential shifts in supply and demand will play a significant role in shaping the inflation landscape.

Key Takeaways:

• Annual inflation rose to 3.5% in February 2025.
• Food and transport costs are the primary drivers of inflation.
• Housing related costs saw a slight decrease.
• Core inflation remains low, while non-core is high.
• The CPI provides valuable insight into the changing cost of living.

How Inflation Affects Your Money:

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Notes 

Knbs report February 2025 - https://www.knbs.or.ke/wp-content/uploads/2025/02/Kenya-Consumer-Price-Indices-and-Inflation-Rates-February-2025.pdf