Kenya Economic Outlook
East Africa’s economic hub:
Kenya is the largest and most diversified economy in East Africa, serving as a regional financial, trade, and technology center. The economy is driven by agriculture, services, and manufacturing, with key exports including tea, coffee, and horticultural products. Nairobi is home to a thriving fintech sector, led by the success of mobile money services such as M-Pesa. Despite strong fundamentals, Kenya faces challenges from public debt, inflation, and climate-related disruptions.
Debt and fiscal pressures:Kenya’s public debt has risen sharply in recent years, exceeding 70% of GDP, due to extensive infrastructure investments, including major roads and the Standard Gauge Railway. The government has struggled with high debt-servicing costs, prompting tax hikes and expenditure cuts to narrow the fiscal deficit. The IMF has been involved in supporting Kenya’s economic reforms, but concerns remain over the country’s ability to balance development needs with debt sustainability.
Agriculture and climate risks:The agricultural sector remains vital to Kenya’s economy, employing over 40% of the population. However, unpredictable weather patterns, including droughts and floods, have negatively affected food security and export revenues. The government is investing in irrigation and climate-resilient agriculture to mitigate risks. At the same time, the country’s growing renewable energy sector—especially geothermal power—has positioned Kenya as a leader in clean energy production in Africa.
Kenya’s economic outlook:The Kenyan economy is expected to expand steadily, supported by strong domestic demand, digital innovation, and infrastructure development. However, reducing the fiscal deficit and improving investor confidence will be crucial to maintaining stability. Inflation has started to ease, but high food and fuel prices remain concerns. If the government successfully manages its debt obligations while sustaining economic growth, Kenya it will continue to solidify its position as East Africa’s economic powerhouse.
Kenya's Macroeconomic Analysis:
Nominal GDP of USD 107.9 billion in 2023.
GDP per capita of USD 2,094 compared to the global average of USD 10,589.
Average real GDP growth of 4.6% over the last decade.
Sector Analysis
In 2022, services accounted for 55% of overall GDP, manufacturing 8%, other industrial activity 16%, and agriculture 21%. Looking at GDP by expenditure, private consumption accounted for 77% of GDP in 2023, government consumption 12%, fixed investment 18%, and net exports -7%.International trade
In 2021, manufactured products made up 31% of total merchandise exports, mineral fuels 2%, food 49%, ores and metals 5% and agricultural raw materials 13%, with other categories accounting for 0% of the total. In the same period, manufactured products made up 52% of total merchandise imports, mineral fuels 26%, food 19%, ores and metals 1% and agricultural raw materials 2%, with other goods accounting for 0% of the total. Total exports were worth USD 7 billion in 2023, while total imports were USD 17 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 4.6% in the decade to 2023. To read more about GDP growth in Kenya, go to our dedicated page.
Fiscal policy
Kenya's fiscal deficit averaged 6.7% of GDP in the decade to 2023. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 4.2% in the decade to 2023. For more information on Kenya's unemployment click here.
Inflation
Inflation averaged 6.3% in the decade to 2024. Go to our Kenya inflation page for extra insight.
Monetary Policy
Kenya's monetary policy rate ended 2024 at 11.25%, up from 8.50% a decade earlier. See our Kenya monetary policy page for additional details.
Exchange Rate
From end-2014 to end-2024 the shilling weakened by 30% vs the U.S. dollar. For more info on the shilling, click here.
Economic situation in Kenya
Mass protests drove a second consecutive slowdown in Q3, with annual GDP growth waning to 4.0% (Q2: +4.6% yoy). Production-wise, the industrial sector swung into contraction, while the agricultural and services sectors lost steam. Shifting to Q4, our panel expects GDP growth to have improved as protests ceased. Available data bears out this prediction. Remittances inflows accelerated, inflation fell to an over one-decade low, and the Central Bank slashed rates, boding well for domestic demand. On the external front, goods exports continued to rise at a double-digit pace through November. In other news, President William Ruto introduced taxes on several goods and services in December, some of which had been withdrawn alongside the Finance Act 2024; these measures will ease the strain on the country’s finances but raise the risk of renewed unrest.Kenya Economic Forecasts
Projections out to 2034.48 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 16 expert analysts.
Want to get insight on the economic outlook for Kenya in the coming years? FocusEconomics collects projections out to 2034 on 48 economic indicators for Kenya from a panel of 16 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Kenya economy. To download a sample report on the Kenya's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.