Hope of lower prices as manufacturing costs fall
KNBS reading places producer prices at their lowest level since March 2023..
✨ Key Highlights
Consumers in Kenya may experience lower retail prices as manufacturing costs continue to fall significantly. The Producer Price Index (PPI) dropped in the final quarter of 2025 to levels not seen in nearly three years, signalling reduced production costs across key economic sectors.
- The Producer Price Index (PPI) fell to 134.18 in December 2025, marking its lowest point since March 2023.
- The Kenya National Bureau of Statistics (KNBS) reported a year-on-year producer inflation rate of -2.43 percent in December 2025.
- While a fall in the PPI often precedes lower consumer prices, businesses may choose to expand profit margins instead of passing on all savings, according to the KNBS.
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Kenya Reports SGR Growth, Sh125.9M in EV Charging Revenue, and Lower Manufacturing Costs for 2025 - February 2026
Kenya Power reported earning Sh125.9 million from electric vehicle (EV) charging in 2025, attributing the growth to increased EV uptake and supportive government policies. In the transport sector, Kenya's Standard Gauge Railway (SGR) also saw significant growth in 2025, with both passenger traffic and cargo volumes increasing notably despite a fare hike. The railway generated substantial revenue, indicating strong demand. Concurrently, consumers may experience lower retail prices as manufacturing costs continue to fall significantly. The Producer Price Index (PPI) dropped in the final quarter of 2025 to levels not seen in nearly three years, signalling reduced production costs across key economic sectors.
