Kenya Economic Update : Sustaining Macroeconomic Gains, Advancing Fiscal Reforms

Overview & Synopsis

Economic growth moderated slightly in 2025, with real GDP expanding by 4.6 percent compared with 4.7 percent in 2024. This was despite favorable macroeconomic conditions such as easing inflation, accommodative monetary policy, and recovering private sector credit. Growth was weighed down by a severe drought in the final quarter of the year, which contracted agriculture value added by 1.3 percent and thus moderated the sector’s yearly performance. Services activity also slowed across trade, transport, finance, and social subsectors, while tourism-related activities continued to grow strongly, particularly in accommodation and food services. Industrial activity strengthened markedly as the construction sector sharply rebounded.