Growth is projected to recover to 4.9% on average during 2026–2027, driven by easing inflation, accommodative monetary policy, and a pickup in credit growth that should support household and business incomes, driving private consumption and investment.
Unless growth translates more efficiently to higher incomes for the poor, poverty is unlikely to decline rapidly. At the international poverty rate ($3.00 in 2021 PPP), poverty in Kenya is projected to decline by 0.7 percentage point to 43.8% in 2025. Structural reforms that raise the productivity of the private sector, support domestic revenue mobilization, expand access to skills, increase access to capital, and strengthen households’ resilience to climate shocks are needed to ensure inclusive growth and strengthen the link between growth and poverty reduction.
Although the economic outlook is broadly positive, it is subject to elevated uncertainty. The continuous failure to achieve fiscal consolidation targets could exacerbate Kenya’s debt vulnerabilities and undermine private sector-led growth. Climate hazards could resume inflationary pressures and food insecurity, affecting growth. Lower than anticipated growth in developed countries could undercut ongoing recovery in Kenyan tourism, exports, and remittances. Geopolitical tensions and elevated commodity prices would further tighten financial conditions, weaken external balances, and impact inflation.