As Nairobi revelers ushered in 2026 with fireworks and prayers, the economic reality on the ground remained stubbornly complex. The Kenya National Bureau of Statistics (KNBS) revealed on New Year's Day that the country closed 2025 with an overall inflation rate of 4.5 percent—a figure that masks a deeply unequal struggle for the average household.

While the headline number held steady from November, it represents a significant climb from the 3.0 percent recorded in December 2024. For the *wananchi*, this isn't just data; it is the difference between a full shopping basket and a compromised dinner. The bureau’s latest report paints a picture of a "mixed" economy where relief in utility bills was aggressively swallowed by the rising cost of putting food on the table and traveling home for the holidays.

The 'Unga' Crisis Returns

The sharpest sting came from the kitchen. The Food and Non-Alcoholic Beverages index—which dictates the survival of millions—surged by 7.8 percent year-on-year. This is the engine driving the cost-of-living crisis, far outpacing the headline inflation rate.

Specific staples saw worrying month-on-month spikes in December:

• Kale (Sukuma Wiki): Prices climbed by 4.7 percent, hitting low-income households hardest.
• Maize Flour (Loose): The cost of unga ticked up, reversing gains seen earlier in the year.
• Potatoes: Recorded significant price increases due to seasonal supply constraints.

"The disconnect between single-digit inflation and the reality at the market stall is widening," noted a senior analyst at a Nairobi-based economic think tank. "When food inflation nears 8 percent, a 4.5 percent national average feels like a fiction to the working class."

Power Bills: A Rare Bright Spot

Amid the gloom, there was a flicker of good news. The Housing, Water, Electricity, Gas, and Other Fuels index offered a reprieve, with electricity prices dropping noticeably between November and December 2025.

Households consuming 50 kWh saw their bills shrink by 2.8 percent, while those on the 200 kWh band enjoyed a 2.6 percent reduction. This dip is largely attributed to increased hydro-generation capacity and a strengthening shilling, which lowered the foreign exchange component of power bills.

However, this relief was partial. The cost of cooking gas (LPG) defied the energy trend, inching up by 0.4 percent—a small but painful increase for urban families already squeezed by school fee deadlines looming in January.

The Holiday Transport Tax

December's festivities came with their traditional penalty: the transport surge. The Transport Index rose by 5.2 percent over the last twelve months. As is custom, matatu operators and long-distance bus companies hiked fares to capitalize on the Christmas exodus, pushing the monthly transport inflation up significantly.

While global oil prices have stabilized—trading around $75 (approx. KES 9,750) per barrel—local pump prices have been slower to adjust downwards, keeping transport costs elevated. This "stickiness" in fuel pricing continues to bleed into the cost of goods, adding a hidden markup to every tomato and sack of charcoal transported to the city.

As Kenyans brace for "Njaanuary," the data suggests a year of cautious budgeting ahead. The 4.5 percent inflation rate is manageable on paper, but for the family splitting a smaller ugali amid rising school fees, the statistics offer little comfort.