Kenya’s inflation was at 3.8 per cent year-on-year in June, same level as the previous month, the statistics office said on Monday. This is a drop from down from a peak of 9.6 per cent in October 2022.

National Treasury Cabinet Secretary John Mbadi, while presenting the 2025/2026 national budget at Parliament Buildings in Nairobi last month, attributed the decline to a series of targeted government policy interventions.

“In response to the decline in inflation, the Central Bank of Kenya has gradually eased monetary policy, lowering the bank rate from 13 per cent in August 2024 to 9.75 per cent in June 2025,” Mbadi said.

He noted that the easing inflation had led to a reduction in the prices of essential food commodities, including maize flour, sugar, milk, bread, wheat flour and rice.

“For example, the cost of a 2-kilogramme packet of sifted maize flour has dropped from Sh177 in October 2022 to Sh156 in May 2025,” Mbadi stated.

Inflation was primarily driven by the rise in prices of items such as food and non-alcoholic beverages, transport and housing, the Kenya National Bureau of Statistics said in a statement.

Monthly inflation was at 0.5 per cent in June, same as a month earlier, it said.

The central bank targets Kenya’s inflation to be within the 2.5 per cent to 7.5 per cent range in the medium term.

When he presented his budget, Mbadi highlighted a decline in energy and power costs over the same period, further contributing to a more stable cost of living. Lower inflation and monetary easing have driven down interest rates across the board, he said

Mbadi noted that the 91-day Treasury bill rate has dropped significantly from an average of 15.9 per cent in 2024 to 8.3 per cent in May 2025.

Similarly, average commercial bank lending rates, which peaked at 17.2 per cent in November 2024, have decreased to 15.7 per cent.

“This decline has not only reduced the cost of government borrowing but is also expected to stimulate increased lending to the private sector,” he added.

• A Tell / Reuters report