Editor's Review

The World Bank has revealed that Kenya’s annual inflation rose to 7.3 percent in October 2026, up from 4.6 percent in 2025.  

The World Bank has revealed that Kenya’s annual inflation rose to 7.3 percent in October 2026, up from 4.6 percent in 2025.  

In a report released on Wednesday, November 4, the World Bank said the increase was driven by higher fuel prices and weather-related disruptions to food supplies. 

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Despite the increase, the World Bank said Kenya’s inflation remained within the Central Bank of Kenya’s (CBK) target range of 2.5 to 7.5 percent.

According to the World Bank, energy-related inflation, which covers housing, water, electricity, gas, other fuels and transport, rose to 10.4 percent in October 2026, compared to 3.4 percent in October 2025.

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File Image of Qimiao Fan, who is the World Bank Division Director for Kenya, Rwanda, Somalia, and Uganda.

The World Bank linked the surge to higher global oil prices and elevated fuel import costs amid supply disruptions and heightened geopolitical tensions arising from the Middle East conflict. 

“The increase was primarily driven by higher energy and food prices. Energy-related inflation encompassing housing, water, electricity, gas and other fuels, and transport accelerated sharply to 10.4 percent in October 2026 from 3.4 percent a year earlier, reflecting higher global oil prices and elevated fuel import costs amid supply disruptions and heightened geopolitical tensions due to the conflict in the Middle East,” the report read. 

The International lender also said the contribution of energy-related components to overall headline inflation increased from 18.7 to 36.2 percent. 

Food inflation also increased, rising to 10.2 per cent in October 2026 from 8.0 per cent in 2025. 

“Food inflation edged up to 10.2 percent in October 2026 from 8.0 percent a year earlier, driven by weather-related supply constraints and higher transportation costs associated with increased fuel prices,” the report said. 

The report also noted that core inflation, which excludes food and energy prices, marginally increased to 2.5 percent in October 2026 from 2.2 percent. 

The World Bank said the slight increase suggests that domestic demand remained subdued and broader inflationary pressures were contained.

Meanwhile, the near-term financial sector indicators improved and private sector credit growth reached 10.6 percent in September 2026. 

“Credit to the private sector expanded to 10.6 percent in September 2026, a marked improvement from the 5.0 percent recorded the year before,” the report stated. 

Credit growth was strong, particularly in mining and quarrying, agriculture, finance, insurance and trade. 

At the same time, the report said Kenya could have saved approximately KSh116 billion (US$900 million) on the initial construction of the Standard Gauge Railway (SGR) between Mombasa and Nairobi if it had been built at a cost comparable to Tanzania's Dar es Salaam–Dodoma railway.

The report mentioned that Kenya's Mombasa–Nairobi SGR cost approximately KSh988 million (US$7.6 million) per kilometre, compared to KSh741 million (US$5.7 million) for Tanzania's Dar es Salaam–Dodoma railway and KSh689 million (US$5.3 million) for the Djibouti–Addis Ababa railway.