A sharp surge in global energy prices triggered by Middle East tensions is set to deepen inflationary pressures in Kenya.
The lender is cautions against blanket subsidies and instead deploy targeted relief for vulnerable groups while accelerating a transition to renewable energy.
Brian Ngugi, nairobi The World Bank warned on Tuesday that Kenya and other developing economies face a prolonged cost-of-living squeeze from a 24 per cent surge in energy prices driven by the Middle East war, urging governments to shield the poorest households through targeted support while accelerating a shift to renewable energy.
“The war is hitting the global economy in cumulative waves: First, through higher energy prices, then higher food prices and finally, higher inflation, which will push up interest rates and make debt even more expensive,” Indermit Gill, the World Bank’s Chief Economist, said in the latest Commodity Markets Outlook.
“The poorest people, who spend the highest share of their income on food and fuels, will be hit the hardest.” The report, released in Washington, projects overall commodity prices will rise by 16 per cent in 2026, the steepest climb since the 2022 invasion of Ukraine.
Kenya’s inflation accelerated to 4.4 per cent in March, up from 4.3 per cent in February, driven by rising food and fuel costs, according to Kenya National Bureau of Statistics (KNBS) data.
The statistics bureau is set to release April’s figures in the coming days, with Kenyans already confronting a worsening cost‑of‑living squeeze, should the trend continue.
The World Bank noted that attacks on energy infrastructure and shipping disruptions in the Strait of Hormuz, which handles about 35 per cent of global seaborne crude oil trade, have....
