- Kenya inflation eased to 4.4% in January 2026, marking a six-month low
- Food prices remain elevated, with non-core inflation still above 10%
- Data sets the tone for the February 10 CBK Monetary Policy Committee meeting
Kenya inflation eased to a six-month low in January 2026, offering cautious relief to households and policymakers as price pressures moderated at the start of the year. The latest data shows inflation holding near the lower end of the Central Bank of Kenya’s preferred target range, even as essential costs continue to weigh heavily on consumers.
The slowdown comes just days before the first Monetary Policy Committee (MPC) meeting of 2026, where markets are closely watching whether the central bank will extend its easing cycle following nine consecutive rate cuts.
Kenya Inflation Falls to 4.4% as Transport and Food Costs Moderate
According to data released by the Kenya National Bureau of Statistics (KNBS), the annual inflation rate in Kenya eased to 4.4% in January 2026, down from 4.5% in December and November, largely due to base effects. This marks the lowest inflation reading since August 2025 and keeps price growth below the 5% midpoint that the Central Bank of Kenya (CBK) uses to anchor inflation expectations.
KNBS noted that the slower rise in headline inflation reflected price declines in several key categories, particularly transport and selected food items. Transportation inflation slowed to 4.8%, down from 5.2% previously, supported by a 1.9% drop in inter-town bus and matatu fares, alongside modest declines in fuel prices. Petrol prices fell by 1.1%, while diesel prices declined by 0.6% during the month.
Food inflation also moderated slightly, easing to 7.3% from 7.8%, as prices of staples such as sugar (-3%), mangoes (-3.2%), and cooking oil (-0.1%) declined. However, KNBS cautioned that the easing came despite a worsening food situation following the shortest October–December rainfall season since 1981, which continues to threaten supply conditions.
On a monthly basis, the Consumer Price Index (CPI) rose by 0.6%, unchanged from December, indicating that price pressures remain present even as annual inflation trends lower. Inflation in housing, water, electricity, gas, and other fuels accelerated to 2.2% from 1.6%, reflecting rising utility costs, including electricity prices, which increased by as much as 3.7% in a single month.
“The price increase was primarily driven by a rise in prices of items in the Food and Non-Alcoholic Beverages, Transport, and Housing divisions,” KNBS said in its Consumer Price Indices and Inflation report.
Why Kenyans Still Feel the Squeeze as MPC Meeting Approaches
Despite the easing in headline Kenya inflation, KNBS data shows that price increases remain heavily concentrated in essential items, helping explain why many households continue to feel worse off. Food prices, which account for 32.9% of the inflation basket, rose sharply on an annual basis, with some staples recording double-digit increases.
Although fuel prices dipped modestly, the transport index still rose 4.8% year-on-year. Education costs also climbed, with KNBS data showing private secondary school tuition increasing by 3.1% in January, alongside notable increases in pre-primary and primary school fees.
A key divergence highlighted in the data is between core inflation and non-core inflation. Core inflation, which excludes food and fuel, ticked up for the first time in six months to 2.2%, while non-core inflation eased for the first time in eight months but remained elevated at 10.3%.
The inflation data lands ahead of the February 10 Monetary Policy Committee meeting, the first of 2026, where attention is shifting to whether the CBK will pause its easing cycle after nine consecutive rate cuts totaling 400 basis points. Market participants widely expect the benchmark rate to be retained at 9.0%, given inflation’s position near the lower bound of the target range.
Investor focus is also turning to government borrowing conditions after the Kenya Pipeline IPO. The Central Bank of Kenya has opened the sale of the February Treasury bond, offering a 15-year and 25-year paper with a combined target of KES 50 billion, as investors assess yields amid expectations of stable monetary policy.
Looking ahead, experts forecast Kenya inflation to ease further to 4.0% by the end of the current quarter, before trending around 4.6% in 2027 and 4.2% in 2028, according to its econometric models.
