The International Monetary Fund (IMF) projects Kenya’s inflation to rise to 6.0% in 2026 from 4.1% in 2025, warning of mounting economic pressures as global energy and food prices rise.
In its October 2026 World Economic Outlook report, Resilience Under Strain, Urgent Choices, the IMF also forecasts Kenya’s economic growth to slow slightly to 4.5% this year, down from 4.6% in 2025.
The inflation projection is up 1.9%, signalling renewed pressure on household purchasing power as the cost of essential goods and services potentially rises.
The report ranks Kenya among economies vulnerable to external shocks because it relies on imported energy and is exposed to global commodity price movements.
The IMF projects global inflation to rise to 4.7% in 2026 from 4.1% in 2025, largely driven by higher energy and food prices.
Global oil prices are also expected to average $95.74 per barrel in 2026, compared with $67.74 in 2025. This represents an increase of approximately 41%, potentially raising fuel, transport and production costs in oil-importing countries such as Kenya.
Higher fuel prices can feed into the wider economy through transport fares, electricity generation costs, manufacturing and the distribution of agricultural produce.
Food prices are also projected to rise by 5% globally in 2026, creating additional risks for households that spend a substantial proportion of their income on basic necessities.
The IMF warns that energy-importing economies outside the technology investment boom face a particularly difficult outlook, with higher import bills, currency pressure, and weaker household purchasing power.
The Fund forecasts the country’s current-account deficit to widen to 4.5% of gross domestic product (GDP) in 2026, from 2.8% in 2025.
A widening deficit could increase pressure on foreign exchange requirements as the country pays for imported goods, including fuel. It also exposes the economy to global supply-chain disruptions and shifts in international commodity prices.
Despite the inflation risks, the IMF expects Kenya’s economy to continue expanding, although at a slightly slower pace than in 2025. The projected 4.5% growth rate suggests continued economic activity but highlights the challenges of sustaining expansion amid rising costs and global uncertainty.
Across sub-Saharan Africa, the IMF forecasts 4.5% growth in both 2026 and 2027, supported by reforms and improving macroeconomic stability in some countries.
However, the Fund cautions that oil-importing economies remain particularly exposed to higher food and energy prices, which could worsen poverty and strain public finances.
IMF has urged governments to maintain price stability, rebuild fiscal buffers and provide targeted support to vulnerable households while preserving monetary and financial stability.
The report warns that prolonged geopolitical conflicts, extreme weather events, and further supply disruptions could push commodity prices higher, creating additional risks for economic growth and household living standards.