Tomatoes and sukuma wiki recorded the sharpest price increases in the year to December 2025, while electricity and fresh packaged milk posted the steepest declines, as annual inflation closed the year at 4.5 percent.
Data from the Kenya National Bureau of Statistics (KNBS) show tomato prices rose 30.3 percent year-on-year, followed by sukuma wiki at 23.4 percent and mangoes at 23.1 percent, making them the biggest contributors to food inflation.
Other food items that posted notable increases included maize flour (13.2 percent), loose maize grain (12.6 percent), sugar (12.5 percent) and Irish potatoes (8.3 percent).
In contrast, electricity prices fell by 3.7 percent between December 2024 and December 2025, while fresh packaged cow milk declined by 1.3 percent, cushioning households against sharper inflation.
“Annual consumer price inflation as measured by the Consumer Price Index (CPI) was 4.5 percent in December 2025,” KNBS said, adding that prices were higher than a year earlier but unchanged from November.
"The price increase was primarily driven by a rise in prices of items in the food and non-alcoholic beverages (7.8 percent), transport (5.2 percent), and housing, water, gas, and other fuels (1.6 percent) over the one-year period."
In December alone, the bus fare between Dandora in Nairobi and Luanda in Vihiga County rose from Sh1,500 to Sh2,000, the biggest price jump recorded during the month.
Stable shilling
Kenya’s inflation rate has remained below five percent since July last year, supported by a stronger shilling and previously high interest rates signalled by the Central Bank of Kenya (CBK).
The local currency has stabilised at around Sh129 for more than a year, helping to ease the cost of imported goods.
A stronger shilling has also contributed to lower electricity tariffs and reduced prices for imported petroleum products.
The fall in inflation to as low as 2.7 percent in October last year, alongside currency stability, has allowed the CBK to sustain cuts to the Central Bank Rate (CBR).
The CBK has said inflation is expected to remain below the midpoint of its target range over the next year, giving it room to support growth without immediate price stability concerns.
Lower borrowing costs are beginning to lift credit uptake, with private sector lending expanding after a prolonged slowdown.
Improved credit conditions come as economic activity gains momentum, with Kenya’s private sector posting its strongest performance in more than five years in November, according to purchasing managers’ surveys.
The rebound in output and new orders has encouraged firms to stabilise operations after a volatile 2025 marked by weak demand, protests and tight financial conditions.
Company executives cite stable inflation, lower interest rates and improved growth prospects as key factors shaping hiring and investment plans for 2026.
A recent CBK survey found that most banks and a growing share of non-bank firms expect to increase staff next year, although hiring remains uneven across sectors.
Executives in agriculture, manufacturing, trade, construction and tourism see stronger demand and easing financing conditions supporting expansion, while high costs continue to weigh on other sectors.
Food inflation remains a key concern for households, particularly as real wages stay under pressure and most new jobs are informal.
Earlier KNBS data showed Kenya created fewer formal jobs in 2024 despite overall employment growth, limiting households’ ability to absorb higher prices.
As a result, while headline inflation remains contained, the cost of living for many households continues to be driven by changes in basic food prices.
