NCBA Group projects that Kenya’s economy will expand by five percent in 2025, supported by improved private sector credit growth, stable inflation, and increased fiscal spending.
The outlook was shared during the NCBA Economic Forum held at the Nairobi Serena Hotel, which brought together policymakers, economists, and industry leaders to explore how Kenya can strengthen its resilience amid shifting global economic conditions.
NCBA Group Managing Director John Gachora said the economic outlook remains positive despite global uncertainty, adding that effective policy coordination and prudent fiscal management are vital for sustainable growth.
“Kenya must continue to pursue pragmatic policy coordination and efficiency in public spending to ensure sustainable growth. Through our thought leadership platforms, we will continue to share innovative research and engage experts on strategies that promote resilience. This is an investment worth making and one that NCBA stands ready to support,” said Mr. Gachora.
According to Gachora, the global economy has maintained steady growth in 2025, expanding by 3.2 percent compared to 3.3 percent in 2024. He noted that Kenya’s performance reflects resilience amid tightening global financial conditions and trade disruptions. However, he warned that slower growth in major economies such as the United States and key Asian markets could weigh on Kenya’s exports and remittances in 2026.
The NCBA report highlighted that Kenya’s growth has been anchored by public expenditure, agriculture, and a strong services sector, but warned that high public debt servicing continues to constrain development spending. In the first quarter of the 2025–2026 fiscal year, the government spent KES 509 billion on debt repayment out of a total KES 554 billion in tax revenue.
Gachora emphasized the need for efficient public spending to create fiscal space for investment and ensure better value for money.
Participants at the forum also noted that inflation has been easing throughout 2025 but remains vulnerable to fluctuations in food prices. Discussions centered on maintaining liquidity in the foreign exchange market, deepening regional trade, and strengthening Kenya’s public debt framework to support inclusive growth under the Bottom-Up Economic Transformation Agenda (BETA).
Gachora added that Kenya’s services sector, including telecommunications, transport, and domestic trade, continues to anchor growth. The manufacturing sector is expected to post mixed results, with food processing showing stronger resilience.
He also projected positive export performance, supported by high global coffee prices averaging around USD 7.00 per kilo and stable horticultural exports, helped by the European Union’s extension of its deforestation regulation compliance period for small and medium enterprises.
Looking ahead, NCBA forecasts that Kenya’s economy will grow by 5.1 percent in 2026, driven by fiscal momentum, export diversification, and improved investor confidence.
Gachora also proposed the development of a high-frequency consumer activity indicator to better capture household spending trends, which account for more than 70 percent of Kenya’s GDP.
He reaffirmed NCBA’s commitment to supporting research, innovation, and policy dialogue that contribute to informed decision-making and sustainable growth, adding that platforms such as the NCBA Economic Forum remain key to shaping Kenya’s economic future.
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