Kenya’s Economy Expands 4.9% in Third Quarter 2025

Kenya’s economy grew by 4.9 percent in the third quarter of 2025, according to the Kenya National Bureau of Statistics (KNBS). This represents an improvement over the 4.2 percent growth recorded during the same period in 2024.

The KNBS attributes the increased growth to improved output in key sectors, including agriculture, manufacturing, and transport, demonstrating the economy’s resilience amid global uncertainties.

Agricultural Sector Performance

The agriculture, forestry, and fishing sector expanded by 3.2 percent. This growth was supported by increased milk production and higher exports of cut flowers, a significant contributor to foreign exchange earnings. The sector’s performance indicates a gradual stabilization following recent disruptions related to weather patterns and fluctuating input costs impacting smallholder farmers.

Manufacturing Sector Growth

Manufacturing expanded by 2.5 percent, slightly exceeding the 2.3 percent growth observed in the third quarter of 2024. However, the growth was uneven, with non-food manufacturing, particularly chemicals and textiles, leading the gains. Food processing experienced a marginal contraction. These results highlight ongoing structural challenges within the agro-processing sector, including supply chain inefficiencies and elevated raw material costs that affect competitiveness and value addition.

Transport and Storage Sector Expansion

The transport and storage sector grew by 5.2 percent, up from 4.6 percent a year earlier. Increased activity across road, water, and air transport contributed to this expansion. Kenya’s role as a regional logistics hub, supported by infrastructure investments such as the Standard Gauge Railway (SGR), continues to drive growth in this sector.

Economic Outlook and Challenges

Analysts suggest the 2025 growth trajectory underscores the need for policies that strengthen industrial productivity, enhance agricultural resilience, and sustain infrastructure investment. Long-term sustainability will depend on continued structural reforms, as fiscal pressures, high energy costs, and climate variability remain key risks. Expanding intra-African trade under initiatives like the African Continental Free Trade Area (AfCFTA) could further support export diversification and regional integration. Kenya’s performance reflects a shift toward a more diversified, service-oriented economy, aligning with broader continental efforts focused on resilience, regional cooperation, and homegrown priorities.