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Kenya’s economy is expected to grow by 5.3% in 2025, as reported by the National Treasury.
In the Budget Policy Statement for 2025, released in Nairobi on Wednesday, the Treasury indicated that this growth would be an improvement from 4.6% in 2024 and 5.6% in 2023.
The economy shrank in 2024 due to a slowdown in economic activity during the first three quarters and a decline in private sector credit growth to key industries, according to the Treasury.
The projected growth in 2025 is expected to be driven by improved agricultural productivity and a strong services sector.
The Treasury highlighted that agricultural productivity will benefit from favorable weather conditions and government initiatives aimed at enhancing productivity. Growth in this sector is anticipated to average around 3% in 2025.
The services sector is also expected to remain robust, with an average growth of 6.6% over the medium term, according to the Treasury.
Ongoing reforms in the ICT sector are expected to support growth in financial services, healthcare, and public administration.
The tourism industry is expected to gain from the government’s efforts to revitalize the sector by promoting international conferences, cultural festivals, and wildlife safaris.
The Treasury also projected that domestic demand will remain strong, with consumption accounting for about 87.4% of GDP in 2025, supported by easing inflation.
Cabinet Secretary for National Treasury and Economic Planning, John Mbadi, stated that the government would focus on fiscal consolidation to reduce public debt risks while creating room to fund essential public services.
