NAIROBI, Kenya— Kenya’s economic outlook is showing signs of improvement, with inflation dropping to 3.8pc in May 2025; the lowest level since early 2021 according to Treasury Cabinet Secretary John Mbadi.
The announcement came as he presented the 2025/26 national budget estimates before Parliament.
Mbadi attributed the economic stabilization to a series of government policy interventions over the past two years, including efforts to manage the public debt, contain fiscal deficits, stabilize the exchange rate, and support agricultural production amid global supply chain disruptions.
“The government policy interventions have strengthened the microeconomic indicators: Inflation rates have declined to 3.8 percent in May 2025 from a peak of 9.6 percent in October 2022,” said Mbadi.
He noted that the reduced inflation has been particularly felt in the food basket, bringing relief to many Kenyan households that have endured high living costs over the past two years.
“The prices of essential food items including sugar, milk, maize flour, wheat flour and rice has eased,” he added.
The drop in inflation comes after months of tightening monetary policy by the Central Bank of Kenya, improved rainfall boosting food production, and subsidized fertilizer and farming inputs under the government’s agriculture support program.
The Treasury has also been pushing reforms to enhance revenue collection while keeping the cost of living in check.
Analysts say the easing inflation could provide fiscal space to stimulate investment and expand social protection programs.
However, challenges still persist, including high debt servicing costs and the need to create more jobs to match the country’s growing labor force.
