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National Treasury and Economic Planning CS John Mbadi has reported a decline in the inflation rate to 3.5% in February 2025, down from 6.3% in February 2024.
This reflects a slower increase in the cost of goods and services, signaling a reduction in inflationary pressure on households.
According to data from the Kenya National Bureau of Statistics (KNBS), prices of essential commodities recorded notable decreases over the past year.
The cost of maize grain fell by 8.7%, while sifted maize flour (2kg) dropped by 7.4%, from Sh154 to Sh143.
White wheat flour (2kg) declined by 17.5%, and sugar saw a 16.8% decrease from Sh200 per kg to Sh165.
Fuel prices also reduced, with kerosene dropping by 21.5%, petrol by 14.4%, and diesel by 14.5%.
The cost of electricity for households consuming 200 KWH decreased by 16.6%.
However, some commodities saw price increases, with cooking oil rising by 5% from Sh333.31 to Sh 350.10 per litre.
Household products that have dropped in price
Has the value of Sh1000 increased or decreased?
According to data from KNBS, over the past year, the purchasing power of Sh1,000 has slightly improved for essential goods.
Staple foods like maize flour, wheat flour, and sugar have become more affordable, allowing consumers to buy more for the same amount.
Fuel and electricity costs have also dropped, benefiting motorists and households.
However, cooking oil prices have risen, slightly reducing purchasing power for this essential item.
While some prices remain stable, overall, Sh1,000 buys more in 2025 compared to 2024, easing the cost of living for many consumers.
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Policy measures
The government attributes the decline in inflation to various policy measures.
A stronger exchange rate contributed to lower import costs, with the Kenya Shilling stabilising at Sh129.4 per US dollar by January 2025.
The Central Bank of Kenya (CBK) adjusted its monetary policy, reducing the Central Bank Rate (CBR) from 13% in August 2024 to 10.75% in February 2025.
This led to lower lending rates and increased credit access. The Cash Reserve Ratio (CRR) was also reduced to 3.25%, allowing banks to extend more loans to businesses and individuals.
In the agricultural sector, government subsidies for fertiliser and seeds led to increased food production.
Maize production rose from 61 million 50kg bags in 2023 to 95 million bags in 2024, while sugarcane production improved, contributing to lower sugar prices.
The stabilisation of fuel and electricity costs was aided by the strengthened shilling and lower global crude oil prices, reducing the cost of importing petroleum products.
Additional measures included expanding social protection programs, such as the Inua Jamii cash transfer program, which provided financial assistance to 1.78 million households.
The Hustler Fund disbursed Sh60 billion, increasing access to affordable credit. The government also approved the payment of Sh206 billion in pending bills, injecting liquidity into the economy.
Looking ahead, the Treasury plans to sustain price stability by supporting agricultural production, maintaining favorable monetary policies, and monitoring market prices.