A new survey shows that workers across Kenya are experiencing stagnation in their wages and salaries, a scenario that continues to trigger different spending habits.

According to the ILAM Consumer Spending Index survey, only participants around Eldoret city reported the highest growth in incomes between June and September, even as most respondents said their incomes posted marginal uptick in the past year.

While respondents Eldoret, a largely agricultural-based economy reported rising income, participants in Mombasa—a port city whose economy is anchored on tourism and import business, said they experienced a dip in incomes during the third quarter of this year.

Overall, over 50 percent of the participants across Kenya said their earnings remained flat compared to a similar quarter in 2024, reflecting the highest stretch of stagnation in incomes on record this year.

Spending more due to inflation

With inflation and slow economic recovery affecting spending, one out of three respondents noted that they were spending more because the prices of most goods due to higher price tags. 

The ILAM Consumer Spending Index report shows that this is a change from the previous quarter, when only 25 percent of respondents said they were spending more because prices were on the rise. 

At the same time, income trends made the story even more complicated. Upper-middle-class and high-income groups saw the biggest increases in earnings, while low-income groups saw the biggest drops. 

"Upper middle class and high income segments had the largest proportion of respondents recording better incomes over the past year while the low income segment had most individuals indicating that their income was lower in the third quarter of 2025 compared to a similar period in 2024," ICEA Lion Group noted in a statement to newsrooms.

Retail is bouncing back and savings are going up

Even with the economic squeeze, ILAM Consumer Spending Index survey report says there were some good changes in how people spend money and buy goods and services. 

For instance, there was a notable increase in savings, investments, and the purchase of insurance policies. During the quarter, SACCOs, commercial banks, and chamas became even more trusted as ways to build wealth. 

ICEA Lion noted: "There was a marginal improvement in the proportion of income allocated to savings, investments and insurance, with SACCOs, commercial banks and chamas strengthening their grip on investments."

Additionally, retail sales also made a big comeback, with more than 60 percent of businesses saying their sales were higher between June and September this year than during the comparable quarter in 2024. 

The sector's health was strongest in retail stores, with Nakuru and Mombasa counties leading the way and Nyeri lagging behind. The report notes that this trend was due to foot traffic rather than price increases for three quarters in a row. 

Economy to grow at 5.2 percent this year

Meanwhile, ICEA Lion Group projects that Kenya’s economy remains resilient, with growth forecast at 5.2 percent this year, supported by a strong performance in agriculture, and the services sector. 

With the Central Bank's move to cut the benchmark lending rate to 9.25 percent, the financial services company expects that improving credit conditions will also drive the country's growth. 

ICEA noted that strong stock market driven by higher demand at the Nairobi Securities Exchange (NSE) is expected to aattract valuations, further improving both foreign and local demand.

"Monetary easing amid stability creates a rare window for investors to anticipate value rather than chase it,” said Gerald Gondo, Group Chief Investment Officer at ICEA LION Group. 

He added: “The opportunity lies in positioning early—across fixed income, alternative investments and select equities—to capture the next leg of growth through greater portfolio diversification.”

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