Nairobi - Kenya's annual consumer price inflation registered 4.5 per cent in August 2025, indicating a general price level 4.5 per cent higher than in August 2024 [1, 2]. This figure, released by the Kenya National Bureau of Statistics (KNBS) on August 29th, 2025, signals a persistent upward trend in the cost of living over the past year, albeit with a more modest monthly increase [1, 3].

The Consumer Price Index (CPI), which measures the weighted aggregate change in retail prices for a fixed basket of goods and services against a February 2019 base period, saw an overall increase from 145.74 in July 2025 to 146.21 in August 2025 [4-6]. This translates to a monthly inflation rate of 0.3 per cent for the period between July and August 2025 [2, 5]. Data for these calculations is collected through a monthly survey conducted in the second and third weeks across 50 urban data collection zones nationwide [5].

The Main Drivers of Annual Price Increases

Over the twelve months leading to August 2025, three major expenditure categories accounted for over 57 per cent of the total weight in the CPI, significantly influencing the annual inflation rate [1]. These were:

Food and Non-Alcoholic Beverages, which experienced an 8.3 per cent rise in its price level [1, 7, 8]. This division alone contributed 2.7 points to the overall inflation [9, 10].

Transport, with prices increasing by 4.4 per cent [1, 7, 11].

Housing, Water, Electricity, Gas and other fuels, whose general price level rose by 0.8 per cent [1, 7, 12].

Monthly Price Movements: A Mixed Bag

While the annual figures highlight broad trends, the month-on-month changes reveal a more nuanced picture of price adjustments [5, 7, 13].

Food and Non-Alcoholic Beverages recorded mixed movements in August 2025, with a divisional increase of 0.6 per cent [7, 14]. 

Noteworthy changes included:

Price drops for items such as fresh unpacketed cow milk (-0.9%), fortified maize flour (-1.7%), sifted maize flour (-1.5%), beans (-0.7%), loose maize grain (-0.4%), and oranges (-0.7%) [14-16].

Significant increases in vegetables, with cabbages registering a 6.3% rise, followed by carrots (2.4%), sukuma wiki (1.9%), and tomatoes (1.2%) [8, 17]. Wheat flour-white and onion bulb prices also rose by 0.9% each, while potatoes increased by 0.7% [8, 16].

In the Transport division, which saw a 0.5 per cent increase month-on-month, developments were also varied [7, 11]. Petrol prices decreased by 0.5 per cent, while diesel prices remained unchanged [11, 18]. However, passenger transport costs surged, with the country bus/matatu fare for the Mombasa to Nairobi route seeing a sharp 15.4 per cent increase, from KSh 1,300.00 in July to KSh 1,500.00 in August 2025 [11, 18, 19]. Local tuk tuk fares also rose by 1.5 per cent [11].

The Housing, Water, Electricity, Gas and other fuels division experienced a slight overall decrease of 0.2 per cent in August 2025 [7, 12]. This was primarily driven by declines in electricity charges, with 50kWh band prices dropping by 2.3 per cent and 200kWh prices declining by 2.1 per cent [12, 17, 19, 20]. Kerosene/paraffin prices also fell by 0.6 per cent [12, 20]. Conversely, single-room house rent increased by 0.1 per cent, and gas/LPG prices rose by 0.4 per cent [12, 20].

Core vs. Non-Core: Dissecting Inflation

The KNBS further disaggregates inflation into "core" and "non-core" components [21]. Core inflation, which focuses on less volatile commodities like manufactured food items, health services, education services, and ICT, stood at 3.0 per cent in August 2025 [21, 22]. The core index slightly decreased from 129.59 in July to 129.57 in August 2025 [21].

In contrast, non-core inflation was considerably higher at 9.2 per cent during the same period, with its index rising to 213.85 [9, 21]. Core inflation contributed 2.8 points to the overall inflation, while non-core inflation contributed 1.7 points [9, 23].

Other notable price changes across the 13 COICOP divisions in August 2025 included [7]:

Alcoholic Beverages, Tobacco and Narcotics: Overall increase of 0.2 per cent, with miraa (khat) rising 1.6 per cent, spirits 0.5 per cent, and beer declining 0.1 per cent [7, 24].

Health: A 0.1 per cent increase, driven by rising costs for diabetes medicines (0.6%), laboratory tests (0.4%), and general practitioner's services (0.1%), while some painkillers and cholesterol medicines declined (0.2%) [7, 25].

Personal Care, Social Protection and Miscellaneous Goods and Services: Rose by 0.2 per cent, largely due to increases in toilet/tissue paper (1.6%), toilet soap (0.4%), and body lotion (0.2%) [7, 26].

Overall, Kenya's economy in August 2025 displayed a complex inflation landscape, with significant annual price increases in essential categories such as food and transport, moderated by some monthly price decreases in areas like electricity and certain food items [1, 12, 14]. This nuanced picture will likely continue to inform policymaking in the coming months. 

How Inflation Affects Your Money:

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Notes

Kenya National Bureau of Statistics. (August 2025). Kenya Consumer Price Indices and Inflation Rates, August 2025.