Kenya’s economy is expected to grow by 5.4 percent in 2025, following a slowdown that saw GDP growth fall to 4.7 percent in 2024—the country’s weakest performance since the economic contraction caused by COVID-19 in 2020.
Treasury CS John Mbadi announced the projection on Tuesday during a press briefing in Nairobi. Mbadi attributed the 2024 downturn to a combination of factors including a constrained government expenditure framework, high interest rates, nationwide protests in June, and adverse weather events.
The Kenya National Bureau of Statistics (KNBS), in its 2025 economic survey, echoed the minister’s assessment, noting that these shocks significantly disrupted key sectors.
“When we started the 2024/2025 financial year, we had projected economic growth of not less than 5.3 percent,” Mbadi said. “But because of the shocks, we only achieved 4.7 percent.”
Despite the slowdown, several sectors of the economy showed resilience. Agriculture grew by 4.6 percent, financial services expanded by 7.6 percent, and both real estate and information and communication services posted growth of 5.3 and 7.0 percent respectively. Public administration and food services also saw robust growth, increasing by 8.2 and 25.7 percent.
In contrast, the mining and construction sectors suffered declines of 9.2 percent and 0.7 percent, respectively, largely due to weak demand and reduced mineral output.
Meanwhile, Kenya’s GDP per capita rose from Sh291,770 in 2023 to Sh309,460 in 2024, signalling some progress in individual income levels despite broader economic challenges.
The country faced a series of disruptions throughout the year, including tighter monetary policy, political unrest, and protests led by Gen Z demonstrators in June. Yet the economy remained relatively stable. Mbadi expressed optimism that the easing of interest rates in 2025 will help revive business activity and boost investor confidence.
Looking ahead, the government expects domestic spending to rise, supported by increased investment and the implementation of fiscal reforms aimed at closing budget deficits and managing public debt. With inflation easing and the Central Bank of Kenya lowering interest rates, borrowing is expected to become more accessible for households and businesses alike.
