Kenya Economy Grows at Slowest Pace Since 2020
TLDR
- Kenya’s economy is expected to grow by 5.4% in 2025, recovering from a slowdown that saw GDP expand just 4.7% in 2024
- The Kenya National Bureau of Statistics attributed the 2024 slowdown to tight fiscal conditions, high interest rates, June 2024’s protests, and extreme weather events
- Agriculture grew by 4.6%, financial services by 7.6%, real estate by 5.3%, and information and communication by 7.0%
Kenya’s economy is expected to grow by 5.4% in 2025, recovering from a slowdown that saw GDP expand just 4.7% in 2024, the slowest rate since the COVID-19 contraction of 2020, Finance Minister John Mbadi said during a press briefing in Nairobi.
The 2025 Economic Survey by the Kenya National Bureau of Statistics (KNBS) attributed the 2024 slowdown to tight fiscal conditions, high interest rates, June 2024’s protests, and extreme weather events. Mbadi said that falling interest rates this year will support economic activity and boost investor confidence.
Despite the challenges, key sectors recorded positive growth in 2024. Agriculture grew by 4.6%, financial services by 7.6%, real estate by 5.3%, and information and communication by 7.0%. Public administration and food services saw strong rebounds, expanding 8.2% and 25.7% respectively. However, construction and mining sectors contracted by 0.7% and 9.2% due to reduced demand and lower mineral output.
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Points clés à retenir
Kenya’s economy showed resilience in 2024 despite global and local headwinds, including policy tightening and political unrest. While growth dipped, recent forecasts suggest a recovery in 2025, supported by easing monetary policy and improving macro fundamentals. The International Monetary Fund projects GDP growth at 4.8% in 2025, slightly below the government’s 5.4% forecast, but still a notable uptick from 2024’s pace. The forecast reflects expectations of stronger domestic demand, increased investment, and renewed fiscal reform momentum aimed at narrowing deficits and stabilizing debt. The Central Bank of Kenya began reducing rates in early 2025 after inflation pressures cooled, helping unlock credit for businesses and households. Investor sentiment is also improving, with treasury reforms, digitized tax systems, and energy sector investments contributing to confidence. However, risks remain. Climate shocks, debt servicing costs, and political pressures could undermine recovery efforts. Sustained structural reform and improved execution of public spending will be key to maintaining momentum in East Africa’s largest economy.
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