Cost of living crisis deepens as inflation hits 7.3pc ahead of polls

Kenya’s cost of living crisis deepened in October, with annual inflation accelerating to 7.3 per cent from 6.8 per cent in September, official data showed on Friday.

This was driven by a relentless surge in fuel,  transport, and staple food prices that now threatens to define the political landscape ahead of the 2027 general election.

The latest figures from the Kenya National Bureau of Statistics (KNBS) showed the overall Consumer Price Index (CPI) rose to 157.60 in October from 156.47 in September, resulting in a monthly inflation rate of 0.7 per cent.

The year-on-year surge is primarily driven by a 17.1 per cent jump in transport costs, a 10.2 per cent rise in food and non-alcoholic beverages, and a 3.7 per cent increase in housing, water, electricity, gas, and other fuels.

These three divisions alone account for over 57 per cent of the total weight across the 13 major expenditure categories, meaning the pain is concentrated squarely on the basic necessities of Kenyan households.

Beyond the 14.7 per cent month-on-month spike in kerosene, the pain is spreading across the basic consumer basket.

A 500-millilitre packet of fresh milk now costs Sh64.13, up 4.7 per cent in a single month, while a litre of cooking oil (salad) edged up 0.5 per cent to Sh361.04.

Starch staples are equally costing more. Irish potatoes rose 2.5 per cent to Sh125.06 per kilogramme, cabbages jumped 4.1 per cent to Sh82.38, and a two-kilogramme packet of white wheat flour climbed 2.1 per cent to Sh184.88.

Even beef with bones, a key protein source, ticked up 0.8 per cent to Sh789.29 per kilogramme, while a kilogramme of beans rose 1.6 per cent to Sh185.75.

Transport costs are also exacting a heavy toll on commuters, with the price of a country bus or matatu fare from Karbanet to Nakuru rising 8.3 per cent month-on-month to Sh650.00, and city bus fares from Westlands to Kangemi jumping 25 per cent to Sh50.00.

Over the past 12 months, the numbers have risen sharply. Kerosene has soared by 41.6 per cent, potatoes have risen by 34.9 per cent, cabbages by 29.1 per cent, and the Karbanet-Nakuru matatu fare by 30 per cent.

A litre of petrol has jumped 22.8 per cent over the year to Sh227.85, while diesel has risen 32.5 per cent to Sh228.77. Conversely, only a few items offered slight relief: sugar prices dropped 1.2 per cent month-on-month to Sh163.84, oranges fell 1.1 per cent to Sh125.81, and electricity for 200kWh dipped marginally by 0.1 per cent to Sh5,529.66.

The cost of living headache has President William Ruto’s money men scratching their heads.

The Central Bank of Kenya (CBK) has spent most of the year attempting to anchor inflation expectations, but the primary drivers of the current spike are external and supply-side shocks, leaving policymakers with limited tools.

While appearing before the National Assembly Departmental Committee on Finance and National Planning on Friday, CBK Governor Kamau Thugge defended the bank’s monetary policy stance, noting that the Central Bank Rate (CBR) has been held at 8.75 per cent since February to ensure stability.

Thugge projected that while inflation is expected to remain within the target range in the near term, geopolitical shocks could worsen the situation.

"The outlook for international oil prices remains uncertain and is predicated on the length and severity of the conflict in the Middle East” Thugge warned.

He further cautioned that the main risks to the inflation outlook relate to "heightened geopolitical risks, particularly the conflict in the Middle East, which has resulted in volatility in global oil prices; continued Ukraine- Russia conflict; and potential supply chain disruptions with risks on food prices due to the envisaged El Niño effect".

The CBK boss also highlighted the external pressure on the economy, noting that the current account deficit is projected to widen to 3.2 per cent of GDP in 2026, up from 2.1 per cent in 2025, directly due to the higher oil import bill.

Despite these pressures, Thugge pointed to a stable shilling, which has held firm at around 129.7194 against the U.S. dollar, supported by adequate foreign exchange reserves that have risen to $14.766 billion, providing 5.9 months of import cover.

He also noted that private sector credit growth has remained strong in September 2026, with notable increases in sectors like Trade (19.2 per cent), Building and Construction (12.9 per cent), and Finance and Insurance (28.6 per cent).

However, the squeeze comes as President William Ruto, who is eyeing re-election in 2027, appeals to Kenyans to grant him another term, arguing his macroeconomic policies are stabilising the economy.

The data is likely to pile pressure on the Ruto administration, which has been under intense public scrutiny to boost incomes and lower the cost of living in line with its 2022 campaign pledges.

With core inflation, which excludes volatile food and fuel, standing at 4.3 per cent, the underlying economic pressure remains stubborn, and the macroeconomic stability lauded by the CBK is failing to translate into relief at the supermarket till and the fuel pump.

As the 2027 election cycle approaches, analysts say, President Ruto will need to convince a deeply strained electorate that his government's interventions, including the temporary reduction of VAT on fuel and subsidies, are providing a tangible buffer against a global storm.