Inflation Rate Ups to 6.6% in August on Escalating Middle East War

Inflation Rate in the month of August edged up slightly to 6.6% from 6.5% July, the cost of living in Kenya pushed up by rising fuel and electricity prices as well as selected food items.

While sifted maize flour prices recorded the largest decline, dropping by 2.7 per cent, followed closely by tomatoes, which fell by 2.2 per cent, and fortified maize flour, which eased by 2.0 per cent, Sukuma Wiki recorded the sharpest rise at 4.3 per cent, followed by Irish potatoes at 4.1 per cent. Beef with bones also increased, though more modestly, by 1.2 per cent.

Key Inflation Drivers

Between July and August 2026, diesel prices declined by 2.2 per cent. In contrast, transport-related services became more expensive over the same period. Local flight fares rose by 4.1 per cent while country bus and matatu fares for inter-town travel increased by 2.1 per cent.

Between July and August 2026, prices of gas/LPG recorded a slight decline of 0.2 per cent. Meanwhile, prices of electricity (200kWh) and charcoal both saw small increases, rising by 0.2 per cent and 0.4 per cent, respectively.

Between July and August 2026, the price of 2 Kg packet of sifted maize flour fell from KSh 157.15 to KSh 152.89. While there was a decline in Ugali, the stable food on the table of most Kenya Households, inflation numbers still went up.

For instance, the price of 2 Kg packet 7 of white wheat flour rose from KSh 172.98 to KSh 173.35, while price of a kilogramme of beef with bones increased more noticeably, from KSh 768.34 to KSh 777.36.

Electricity costs edged upward for both consumption bands, with a 200 kWh bill rising from KSh 5,648.30 to KSh 5,658.80, and a 50 kWh bill increasing from KSh 1,286.84 to KSh 1,289.47.

Diesel, however, became notably cheaper, falling from KSh 224.04 to KSh 219.04 per litre, a decline of about KSh 5.00, while petrol prices remained unchanged at KSh 214.95 per litre.

These increases outweighed a drop in the price of one litre of cooking (salad) oil eased slightly from KSh 358.09 to KSh 356.72, and while price of one kilogramme of loose maize grain edged down from KSh 72.45 to KSh 72.23.

Inflation rate now close to CBK  limits

The annual inflation rate in August 2026, from 6.5% in July, stayed above the midpoint of the Central Bank of Kenya’s 2.5%-7.5% target range for a fifth consecutive month.

Transportation costs, which was up 15.7% from 15.6% in July, was the main source of August inflation upswing, as renewed geopolitical tensions in the Middle East drove oil prices higher.

Moreover, food inflation remained elevated, at 9%, while prices picked up for housing & utilities, at 3.6% from 3.2% in July.

Meanwhile, the core inflation rate, which excludes selected volatile items, quickened to 3.4% from 3.2% in July, highlighting second round effects from higher fuel costs.

On a monthly basis, the Consumer Price Index rose by 0.4% in August, after a 0.2% increase in the prior month.