Kenya's Economic Growth Forecast: 5.3% in 2025
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Synopsis
Kenya's economy is expected to grow by 5.3% in 2025, as per the National Treasury's Budget Policy Statement. This marks an improvement from previous years, driven by agricultural productivity and a resilient services sector amidst ongoing reforms.
Key Takeaways
- Projected economic growth of 5.3% in 2025.
- Improvement from 4.6% in 2024 and 5.6% in 2023.
- Growth driven by agriculture and services sector.
- Average agricultural sector growth of 3%.
- Services sector growth expected at 6.6%.
Nairobi, Jan 16 (NationPress) The economy of Kenya is anticipated to expand by 5.3 per cent in 2025, as reported by the National Treasury.
According to its Budget Policy Statement for 2025, this growth signifies an improvement from 4.6 per cent in 2024 and 5.6 per cent in 2023.
The economy faced a contraction in 2024 attributed to a slowdown in economic activities during the first three quarters and a decline in private sector credit growth impacting key sectors, as per the Treasury's report.
For 2025, the Treasury anticipates that the economic expansion will be propelled by improved agricultural productivity and a robust services sector.
“The agricultural sector’s growth is projected to be significantly influenced by favorable weather and government initiatives aimed at boosting productivity,” stated the Treasury, projecting an average growth rate of approximately 3 per cent in this sector in 2025.
Meanwhile, the services sector is expected to maintain its strength, with an average growth rate of 6.6 percent over the coming years, according to the Treasury.
Ongoing reforms in the ICT sector are predicted to enhance growth in areas such as financial services, healthcare, and public administration. Additionally, the tourism sub-sectors are set to gain from government initiatives aimed at revitalizing this area through the organization of prestigious international conferences, cultural festivals, and wildlife safaris.
The Treasury also forecasted that overall domestic demand will remain strong, with consumption expected to average about 87.4 percent of the GDP in 2025, supported by declining inflationary pressures, as reported by Xinhua news agency.
Cabinet Secretary for the National Treasury and Economic Planning, John Mbadi, emphasized in the policy statement that the government is committed to strengthening fiscal consolidation to mitigate public debt risks while ensuring adequate fiscal space for the provision of essential public goods and services.
