New government data shows Kenya’s economic landscape in Q3 2026 remained resilient, though with a little pressure on prices.
Inflation stayed inside the Central Bank of Kenya (CBK) 2.5% to 7.5% target range, but rose from 6.6% in August to 6.8% in September 2026, mainly because of higher core inflation.
“Government interventions, including subsidies and the temporary reduction of VAT on fuel, continue to mitigate inflationary pressures,” the CBK says.
It attributes the containment of inflation to monetary policy actions, government interventions such as fuel VAT reductions and subsidies, favorable weather supporting stable food prices, and exchange rate stability.
The CBK noted that the El Niño weather phenomenon was a key risk to the growth outlook.
It also maintained a cautious, steady monetary policy stance, with the Monetary Policy Committee holding the Central Bank Rate at 8.75% in August to keep inflation expectations anchored and the exchange rate stable, while supporting economic growth.
The bank also marginally revised upwards its 2026 economic growth forecast, projecting growth to 5% from a 4.9% projection in August.
Leave a comment