Rising fuel prices push inflation in Kenya to 2-year high

Fuel price increases pushed inflation in Kenya to a more than two-year high in May, underscoring mounting cost pressures in East Africa’s largest economy amid rising global energy prices linked to tensions involving Iran.

Data released by the Kenya National Bureau of Statistics on Friday showed annual inflation accelerated to 6.7 percent from 5.6 percent in April, marking the highest level since January 2024.

The sharp increase was driven mainly by higher transport costs, which surged 16.5 percent year-on-year compared with 10 percent in April after the government raised fuel prices in both April and May.

The increases followed a rise in global oil prices amid escalating tensions involving Iran and the broader Middle East conflict, which have heightened inflationary pressures across several African economies dependent on imported fuel.

Prices also rose faster for food and non-alcoholic beverages, which climbed 9.4 percent from 8.8 percent previously, as well as housing, water, electricity, gas and other fuels.

The latest figures highlight growing inflationary challenges for households and businesses as higher transport and energy costs ripple through the wider economy.

The rise in Kenya’s inflation contrasts with trends in some other African economies. In Zambia, annual inflation slowed to 6.6 percent in May, its lowest level in more than eight years, supported by improvements in the kwacha and easing price pressures.

For the country, however, rising inflation could complicate efforts to support economic growth while preserving price stability, particularly as consumers grapple with mounting living costs.

The Central Bank of Kenya is expected to announce its next interest rate decision on June 9 after leaving its benchmark rate unchanged at its April meeting, effectively pausing a nearly two-year easing cycle.