Inflation flatlines below midpoint of the target range in June

Latest reading: Inflation was stable at May’s 3.8% in June, remaining below the midpoint of the Central Bank’s 2.5–7.5% target range for the 13th consecutive month. Still, the reading was slightly above the Bank’s forecast of 3.7%. Looking at the details of the release, price pressures for food and non-alcoholic beverages—which make up a third of the inflation basket—picked up pace as supplies of corn flour, sugar and vegetables tightened. Moreover, transport costs rose at a faster clip due to a 1.5% hike in gasoline prices during the month. Still, a softer increase in housing and utilities costs offset the aforementioned inflationary pressures. Subdued domestic demand plus higher FX reserves bolstering the currency likely further kept a lid on price growth. As a result, the trend was unchanged, with annual average inflation coming in at May’s 3.6% in June. Finally, consumer prices rose 0.48% over the previous month in June, easing slightly from the 0.55% rise logged in May.

Panelist insight: Oxford Economics’ Shani Smit-Lengton commented: “Adverse weather conditions in late 2024 and early 2025 disrupted the harvesting of key staples, such as maize, potatoes, and green vegetables, resulting in higher prices during the first quarter of the year. Some relief might come from the March-May long rains season. […] Nevertheless, flooding remains a significant risk in the near term, particularly in the western regions, where it could disrupt the supply of staple and cash crops, as well as livestock production. Meanwhile, the government’s proposed tax adjustments for the 2025/26 FY could drive up business costs, which might be passed on to consumers.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Kenyan inflation projections for the next ten years from a panel of 15 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable inflation forecast available for Kenyan inflation.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Kenyan inflation projections.

Want to get access to the full dataset of Kenyan inflation forecasts? Send an email to info@focus-economics.com.