The economy is projected to grow at a slightly faster speed in 2026 helped by falling cost of credit, stronger exports and improved household spending, a fresh forecast by select global banks, consultancies and think-tanks shows.
The December 2025 FocusEconomics Consensus Forecast for Sub-Saharan Africa indicate Kenya’s gross domestic product (GDP) will expand by 5.0 percent next year an estimated 4.9 percent in 2025.
The country’s GDP — a measure of all economic activities by the government, companies and individuals — is seen expanding faster than projected 4.1 percent average for the sub-Saharan region.
The outlook by 14 panelists is, however, clouded by high public debt and fiscal vulnerabilities.
Citigroup Global Markets is the most optimistic on growth prospects, forecasting that the economy will expand by 5.8 percent followed by JPMorgan at 5.5 percent, Economist Intelligence Unit (5.4 percent), Standard Chartered (5.3 percent) and Goldman Sachs (5.2 percent).
Analysts at Fitch Ratings and FrontierView both see a growth of 5.1 percent in 2026.
The remainder of the surveyed firms expect Kenya’s economy to grow at a rate lower than 5.0 percent.
Oxford Economics holds the most conservative view among analysts, projecting output growth of 4.5 percent. It is followed by Euromonitor International (4.9 percent), Capital Economics (4.8 percent), Moody's Analytics (4.8 percent) and Allianz (4.6 percent).
“Declining interest rates should spur an acceleration in GDP growth this year and next, keeping both years above the sub-Saharan African average. In 2026, exports should also expand at a faster rate,” the report states.
“A worse-than-expected fiscal stance—about 65 percent of revenue is spent on debt—is a downside risk.”
The Central Bank of Kenya has cut its benchmark interest rate by a cumulative 375 basis points since August 2024 to stimulate lending and investment after months of difficult trading conditions driven by weak spending on non-essential goods and services and anti-government street protests.
Panellists expect further monetary easing to 8.55 percent by end-2026 from 9.25 percent currently, while inflation is projected to remain stable at 4.9 percent, which is within the CBK’s 2.5 to 7.5 percent target range.
Growth in GDP should ideally mean people are earning and spending more money. This should result in increased tax receipts, which the government should ideally spend on improving public services such as education, healthcare and security.
The GDP measure has, however, been criticised for not showing how income is split across various working groups, hence expansion in GDP could sometimes be a result of rich getting richer and poor getting poorer.
Firms projecting a growth output of more than 5.0 percent cite stronger household consumption, improved liquidity due to growth in private sector credit flow and a rebound in exports.
The analysts expect merchandise exports are forecast to grow 4.3 percent next year, recovering from an estimated 3.8 percent contraction in 2025.
Exports earnings will be supported by expected growth in global demand for horticulture such as vegetables, fruits and cut flowers.
Panelists with a conservative outlook, on the other hand, warn that Kenya’s debt overhang and weak fiscal consolidation will continue to constrain investor confidence.
Kenya’s public debt remains elevated at 68.1 percent of the GDP, one of the highest ratios in the sub-Sahara Africa. As a result, the country spends nearly 65 percent of taxes on debt service, leaving little cash for critical public investments such as education, health and infrastructure.
“The negotiations for a new deal with the IMF soured recently, with Kenyan officials arguing that securitized bonds for infrastructure should fall outside the scope of public debt. A deal is key for the country’s financial health,” the report cautions.
