A New World Bank Warning Suggests Millions More Kenyans Could Be Pushed into Extreme Poverty. Here’s What’s Driving the Risk.

Up to 2.4 million more Kenyans could fall into extreme poverty in 2026 as the Middle East conflict drives up fuel, transport and food costs, the World Bank has warned. In its July 2026 Kenya Economic Update, the Bretton Woods Institution cut Kenya’s growth forecast to 4.3 percent, 0.6 percentage points below its pre-conflict projection. It said disrupted global oil supply chains and higher energy costs are raising import bills, weakening household purchasing power and increasing business expenses.

World Bank simulations show the poverty rate could rise by between 2 and 4.5 percentage points, pushing an additional one million to 2.4 million people below the US$3 a day international poverty line, with urban households expected to suffer most because of their heavy reliance on purchased food and motorised transport. That pressure is already visible in prices: transport costs rose 10 percent year on year in April and remained 9.8 percent higher in June, while food prices increased 8.8 percent in April and 8.6 percent in June, alongside sharp increases in diesel and petrol prices between March and April.

The shock threatens an economy that grew by 4.6 percent in 2025 but still struggles to create secure jobs. Informal work accounted for 83.8 percent of employment, while the private sector created only about 54,500 formal jobs, far short of the roughly 800,000 young people entering the labour market each year. At the same time, higher fuel import costs are putting pressure on Kenya’s external position, with the current account(the gap between what Kenya earns from abroad and what it spends overseas) deficit forecast to widen to 4.3 percent of GDP this year.

Beyond the Middle East conflict, the World Bank identified drought, floods, high public debt and election related uncertainty as additional threats to Kenya’s economic outlook. It urged the government to strengthen fiscal discipline, improve tax administration and spending efficiency, protect vulnerable households, and pursue reforms that attract private investment, raise productivity and create more formal jobs.