Nairobi, June 28 -- Kenya faces renewed debt-servicing pressure as the fallout from the Iran-Israel conflict threatens to keep borrowing costs elevated for longer, adding strain to a budget weighed down by rising interest payments.

A new forecast by an independent economic consultancy, Oxford Economics, warns that even if recent diplomatic efforts between the US and Iran lead to a lasting truce, the financial fallout from the conflict has already altered inflation and interest-rate expectations across Africa.

The consultancy says Kenya is among countries where expectations of lower interest rates have given way to forecasts of possible rate increases as policymakers grapple with the inflationary effects of higher fuel and food prices. ...