Rising utility tariffs and a 15.6% annual jump in transportation costs offset cooling grain prices, creating a persistent challenge for policymakers.

NAIROBI — Kenya’s headline inflation rate ticked higher in July 2026, reaching 6.5% year-on-year as persistent transport overheads and fresh increases in household electricity bills continued to strain consumer purchasing power.

Data released by the Kenya National Bureau of Statistics (KNBS) showed the national Consumer Price Index (CPI) rose to 155.20 in July, up 0.2% from June’s reading of 154.91. The annual inflation rate accelerated from 6.4% in June 2026 and stands markedly higher than the 4.1% recorded in July 2025.

According to the statistical agency, price pressures remained concentrated in three core expenditure divisions: Food and Non-Alcoholic Beverages, Transport, and Housing, Water, Electricity, Gas and Other Fuels. Together, these three categories represent over 57% of the total weighting in the national consumer basket.

Transport Overheads and Utility Hikes

Transport costs continued to represent the primary source of price pressure in the East African nation’s economy, surging 15.6% on a year-on-year basis in July. Month-on-month transport inflation logged a 0.3% increase.

While retail fuel prices remained flat month-on-month in July—with diesel and petrol retailing at KSh 224.04 and KSh 214.95 per litre, respectively—the long-term impact of energy inflation remains stark. Over a 12-month period, diesel prices are up 29.7% and petrol has advanced 14.7%. Public transport operators passed these elevated operating costs onto commuters. For instance, city bus and matatu fares between Koja and Westlands in Nairobi reached KSh 100, marking a 16.8% increase compared to July 2025.

Compounding urban pressure, the Housing, Water, Electricity, Gas and Other Fuels index expanded by 0.5% month-on-month, bringing its annual inflation rate to 3.2%. A noticeable uptick in electricity tariffs drove the monthly escalation. The 50 kWh domestic consumption tier rose 3.5% month-on-month to KSh 1,286.84, while the 200 kWh consumption tier climbed 3.1% to KSh 5,648.30. In contrast, cooking gas provided partial relief, as the retail price for refilling a 13 kg LPG cylinder fell 1.1% over the month to KSh 3,432.21, though it remains up 9.1% annually.

Key Indicators: July 2026 Macroeconomic Breakdown

Food Basket Divergence

The Food and Non-Alcoholic Beverages division—the largest component of the basket with a 32.9% weight—registered an annual inflation rate of 9.0% while rising 0.1% month-on-month.

Monthly trends within the food basket displayed sharp divergence between staple grains and fresh agricultural produce:

• Staple Grains & Commodities: Sifted maize flour dropped 1.6% month-on-month to KSh 157.15 per 2 kg packet (-1.4% YoY), fortified maize flour declined 1.2% to KSh 176.18 (-1.8% YoY), and sugar fell 10.4% annually to KSh 167.41 per kilogram. Tomato prices also eased 3.7% during the month to KSh 113.47 per kilogram, though they remain up 33.7% year-on-year.
• Fresh Produce & Meats: These drops were counterbalanced by gains in other fresh items. Irish potatoes rose 2.1% in July to KSh 113.46 per kilogram (+28.4% YoY), Sukuma Wiki (kale) gained 1.6% to KSh 116.22 per kilogram (+26.8% YoY), beef with bones rose 1.0% to KSh 768.34 per kilogram (+10.7% YoY), and mangoes registered a 3.2% monthly jump to KSh 150.19 per kilogram (+7.0% YoY).

Core vs. Non-Core Pressures

Core inflation, which excludes volatile food items and energy costs to measure underlying demand, rose slightly to 3.2% in July 2026 from 3.1% in June. Non-core inflation stood at 15.0% during the same period, down marginally from 15.1% in June.

In terms of overall contribution to the 6.5% headline rate, core components accounted for 3.8 percentage points, while non-core elements contributed 2.7 percentage points. Within the total, the Food and Non-Alcoholic Beverages division added 2.6 percentage points to headline inflation, while Transport contributed 1.5 percentage points.

How Inflation Affects Your Money:

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Notes & Reference Documentation

1. Methodology & Survey Scope: Consumer price metrics are derived from a monthly survey of retail prices across a statistically representative sample of outlets in urban areas across 50 data collection zones nationwide. The current Consumer Price Index (CPI) utilizes February 2019 as its base period.
2. Core CPI Definition: Core inflation measures price movements in non-volatile commodities including manufactured food items, health services, education services, and information and communication services.
3. Primary Reference Document: Data sourced directly from the official report published by the Kenya National Bureau of Statistics (KNBS): Title: The Kenya Consumer Price Index and Inflation Report (July 2026). Release Date: July 31, 2026. Issuing Authority: Macdonald G. Obudho, PhD, EBS, MBS (Director General, Kenya National Bureau of Statistics)