Kenyans could face increased pressure on household budgets as inflation is projected to rise in 2026, with the International Monetary Fund (IMF) warning that mounting global economic risks could further strain vulnerable economies.
In its latest World Economic Outlook 2026: Resilience Under Strain, Urgent Choices, the IMF projects Kenya’s inflation to increase to 6.0 per cent in 2026, up from 4.1 per cent in 2025.
The Fund also projects Kenya’s economy to grow by 4.5 per cent this year, slightly below the 4.6 per cent recorded in 2025, pointing to a modest slowdown in economic expansion.
The IMF says countries such as Kenya remain exposed to global economic shocks because of their reliance on imported energy and limited participation in the artificial intelligence-driven investment boom supporting growth in advanced economies.
The report warns that energy-importing economies face higher import bills, exchange-rate pressures, weaker real incomes and shrinking fiscal space as global inflationary pressures persist.
The projections come against a backdrop of uneven economic performance across emerging markets and developing economies.
The IMF expects growth in this group to slow from 4.5 per cent in 2025 to 3.7 per cent in 2026 before recovering to 4.4 per cent in 2027.
Sub-Saharan Africa, however, is projected to maintain economic growth at 4.5 per cent in 2026, matching the rate recorded in 2025 and forecast for 2027.
The regional outlook masks differences among individual economies.
Nigeria’s growth is projected to rise from 4.0 per cent in 2025 to 4.2 per cent in 2026 and 4.3 per cent in 2027.
South Africa, by contrast, is expected to grow by 1.0 per cent in 2026, down from 1.1 per cent in 2025, before improving to 1.3 per cent in 2027.
Elsewhere, emerging and developing Asia is projected to grow by 5.1 per cent in 2026, down from 5.6 per cent in 2025, with China’s growth forecast to slow to 4.5 per cent this year and 4.0 per cent in 2027.
India is expected to maintain growth of 7.0 per cent in both 2026 and 2027.
The IMF’s warning comes as global inflation is projected to increase to 4.7 per cent in 2026, from 4.1 per cent in 2025, driven mainly by higher energy and food prices.
For Kenya, rising global energy costs could increase the cost of fuel imports and put pressure on transport, production and other essential goods and services.
Businesses facing higher operating expenses may pass some of those costs on to consumers, further affecting household purchasing power.
The Fund also projects the average price of a barrel of oil at US$95.74 in 2026 before declining to US$87.39 in 2027.
While the projected fall could ease some pressure on energy-importing economies in the following year, the outlook remains sensitive to developments in global markets.
The IMF says governments must move beyond coping with successive economic shocks and focus on rebuilding resilience.
Stronger economic foundations and cooperation between countries will be essential to help economies withstand future disruptions while sustaining growth.
