Kenya Projects Economic Growth of 4.9-5.2% by 2026

Kenya’s economy is projected to strengthen in 2026, with growth expected to fall between 4.9 and 5.2 percent. This forecast was presented by the Kenya Private Sector Alliance (KEPSA) in collaboration with the Nairobi Securities Exchange (NSE) and KPMG at the 2026 Economic Outlook Forum.

The projection indicates a moderating recovery following slower expansion in prior years, suggesting improving macroeconomic momentum despite ongoing challenges.

Economic Growth Projections

The KEPSA, NSE, and KPMG forecast anticipates economic growth between 4.9 and 5.2 percent for 2026. This projection is based on recent data indicating real GDP expansion of approximately 4.9 percent in the third quarter of 2025, an increase from 4.2 percent during the same period in 2024. Key drivers of this growth include strong contributions from the agriculture, construction, and transport sectors. KEPSA Vice Chair Brenda Mbathi described the forecast as a “resilient bounce back,” noting improved performance across services, agriculture, and construction. While growth remains below pre-pandemic historical averages of around 6 percent, it represents a positive trend.

Inflation and Monetary Policy

Inflation has significantly decreased since earlier macroeconomic pressures, settling within a stable range that supports consumer demand and business planning. The Central Bank’s target range was maintained in late 2025. Monetary policy easing and more accommodating credit conditions have facilitated private-sector borrowing, particularly in trade, consumer durables, and agriculture.

Sector Performance

Agriculture and related activities have demonstrated resilience, benefiting from favorable weather conditions and increased food production. A rebound in construction and infrastructure projects has also sustained activity in sectors previously affected by cash-flow limitations. Strengthening private sector credit growth, which followed a period of contraction, and a more favorable lending environment are contributing to improved aggregate demand.