August Inflation Accelerates To 4.5% Y/Y, Fastest Pace Since June 2024

The market closed the day in the green, with the NSE 20 and NSE 25 up by 1.0% and 0.5%, respectively. In addition, the NASI and N10 edged upwards by 0.6% each.

Equity turnover softened by 48.1% to close the session at USD 5.2m. Local investors led market activity, accounting for 64.4% of trades, up from 62.3% the Friday prior.

KCB Group dominated trading activity, accounting for 25.1% of the day’s turnover. The counter’s price function remained unchanged at KES 54.25, mainly attributable to local investor activity.

Among the top-mover power stocks, KenGen and Kenya Power surged by 8.4% and 6.3% to KES 9.50 and KES 13.60, respectively.

Safaricom notched higher by 0.7% to KES 28.80. On the other hand, Equity Group and Co-op Bank remained unchanged at KES 56.00 and KES 17.80, respectively.

Home Afrika was the day’s top gainer, up 10.2% to close at KES 0.97, likely buoyed by investor sentiments as the firm recorded a 20.0%y/y rise in its 1H25 earnings per share to KES 0.24. On the other hand, Express shed 7.9% to KES 6.10, closing as the session’s leading laggard.

Foreign investors turned bearish in the session, with net outflows of USD KES 413.6k. KenGen led the selling charge while Jubilee Holdings led the buying charge.

Expected tomorrow (02nd September 2025) – Stanbic Holdings KES 3.80 interim dividend book closure, Car & General KES 0.30 interim dividend book closure.

In August 2025, consumer prices rose by 4.5% y/y, the fastest pace since June 2024 and slightly above the upper bound of our projection. Core inflation eased marginally to 3.0% from 3.1%, while non-core inflation jumped by 196.72bps to 9.2%, from 7.2%, largely on account of higher food prices. Overall, headline and core inflation remain stable, while non-core inflation continues to exhibit volatility.

The y/y increase in headline inflation was largely driven by a 150bps rise in the food index, reflecting double-digit growth in flour, fruit, and vegetable prices. The transport index also climbed 4.4%, mainly on account of higher bus fares along the Mombasa–Nairobi route, despite relative stability in fuel prices. In contrast, the household utilities index recorded slower growth of 0.8%, supported by lower electricity and kerosene costs, even as gas and rent prices edged higher. Notably, small-scale electricity tariffs declined by 2.0%, effectively reversing the 2.1% increase recorded in June. The chart below illustrates the growth trajectory of the food and non-alcoholic beverages as well as transport indices against headline inflation – the indices account for more than 40% of the consumer price basket.

Month-on-month, consumer prices rose by 0.3%, reflecting relative stability across key indices. However, upward pressures persist, driven by elevated vegetable prices, rising maize costs, and higher global fuel prices. Overall, core indicators signal continued price stability, supported by a steady Kenyan shilling against the U.S. dollar.

Read Also: The Price of Hunger: A Deep Dive into Kenya’s Food Inflation Crisis — June 2025