The National Treasury projects that Kenya’s economy will grow 5.3% in 2025, slightly lower than the Central Bank of Kenya’s December 2024 prediction of 5.5%.
On December 5, 2024, the Central Bank of Kenya projected economic growth of 5.5% in 2025 and 5.1% in 2024, primarily driven by the resilience of key service sectors, agriculture, and improved exports.
The draft 2025 Budget Policy Statement notes that Kenyan economic growth slowed in the first half of 2024, with real GDP growth averaging 4.8% compared to 5.5% in 2023.
Third-quarter 2024 GDP growth was 4.0%, a significant slowdown from the 6.0% recorded in the same quarter of 2023 and the slowest in four years, primarily due to contractions in key sectors such as construction, mining, and quarrying.
“Economic growth is estimated to have slowed to 4.6% in 2024 from a growth of 5.6% in 2023, reflecting a deceleration of economic activities in the first three quarters of 2024 and a slowdown in private sector credit growth to key sectors of the economy,” stated Treasury Cabinet Secretary John Mbadi.
“Growth is expected to recover to 5.3% in 2025 and maintain this momentum over the medium term, largely driven by enhanced agricultural productivity, a resilient services sector, and the ongoing implementation of priorities under the Bottom-Up Economic Transformation Agenda (BETA),” he added.
Kenya recorded a high of 7.6% growth in 2021 following a low of 0.3% in 2020 due to the COVID-19 pandemic. Subsequent growth rates were 5.1% in 2019, 4.9% in 2022, and 5.6% in 2023.
In late 2024, the International Monetary Fund (IMF) lowered its predictions of Real GDP growth for Kenya, revising its forecasts from 5.0% in 2024 and 2025 to lower figures. This made Kenya the only middle-income country in Africa that the IMF did not predict would recover in 2025.
According to the Kenya National Bureau of Statistics (KNBS) Q3 2024 Gross Domestic Product Report, the Kenyan economy recorded a 4.0% growth in Q3 2024, a decline from the 6.0% expansion in 2023.
This performance was primarily driven by 4.2% growth in the agricultural sector due to favourable weather conditions, leading to steady growth in agricultural output.
Consequently, the economy recorded an average growth of 4.5% in the first three quarters of 2024, a decline from the 5.5% average growth recorded in the same period of 2023.
The average GDP growth rate for 2024 is expected to be 4.8% to 5.0%, a decline from the 5.6% expansion in 2023.
