Kenya Headline Inflation Edged Up by 0.1pp in July, In Line With Consensus

Economics Research 31 July 2026 | 11:45AM BST

Kenya: Headline Inflation Edged Up by 0.1pp in July, In Line With Consensus

Bottom Line: Headline inflation edged up from 6.4%yoy in June to 6.5%yoy in July, in Ludovica Ambrosino | line with consensus. The increase was due to food inflation, which increased from Goldman Sachs International +8.8%yoy in June to +9.3%yoy in July, in line with our expectations. This was partially Andrew Matheny offset by lower transport inflation, which decreased from 15.9%yoy in June to | 15.4%yoy in July, and by utilities prices, which decreased from 3.4%yoy to 3.2%yoy. Goldman Sachs International

Core inflation increased marginally from +3.1%yoy in June to +3.2%yoy in July. On a sequential basis, headline CPI (SA) increased from +0.1%mom in June to 0.6%mom in July, and core inflation (SA) decreased from +0.3%mom to +0.2%mom. We now expect inflation to continue to increase for the rest of the year and to average at 6.1%yoy.

At its June meeting, the CBK kept its benchmark rate on hold at 8.75%, in line with our and consensus expectations. The next meeting will be held in August. The CBK sees the current monetary policy stance as appropriate to ensure that inflation expectations remain anchored “within target range” (5.0% +/-2.5%) and the exchange rate stable. In line with April’s forward guidance, they expect headline inflation to remain within the target range in the near term, conditional on the assumption of a near-term “de-escalation of the conflict in the Middle East”. However, as inflation remains high, and given the pressure of the current account coming from the high oil prices of 2026H1, we expect the CBK to stay on hold until end-2026, restarting its cutting cycle in Q1 2027.

n Headline Inflation:+6.5%yoy, up from +6.4%yoy in June n Food Inflation: +9.3%yoy, up from +8.6%yoy in June n Utilities Inflation: +3.2%yoy, down +3.4%yoy from June n Transport Inflation:+15.4%yoy, down from +15.9%yoy in June n Core Inflation: +3.2%yoy, up from +3.1%yoy in June

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Reg AC We, Ludovica Ambrosino and Andrew Matheny, hereby certify that all of the views expressed in this report accurately reflect our personal views, which have not been influenced by considerations of the firm’s business or client relationships. Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Goldman Sachs’ Global Investment Research division. Contributing Authors: Ludovica Ambrosino Goldman Sachs International, Andrew Matheny Goldman Sachs International. Unless otherwise stated, the individuals listed in the Contributing Authors disclosure of this report are analysts in Goldman Sachs’ Global Investment Research division.

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