Kenya’s economy has defied global and regional headwinds to register robust growth, averaging 5.1 percent annually between 2022 and 2024, Treasury Cabinet Secretary John Mbadi told Parliament on Thursday during the reading of the 2025/26 Budget.
“This growth is well above the world average of 3.4 percent and 3.8 percent for the sub-Saharan Africa region over the same period,” said Mbadi.
“It reflects sound and deliberate policies, as well as the agility of our well-diversified economic structure.”
In 2024, the economy expanded by 4.7 percent, with most sectors posting positive growth. However, Mbadi noted that the construction and mining and quarrying sectors registered negative growth.
Looking ahead, the Treasury projects the economy to grow by 5.3 percent in both 2025 and 2026.
Mbadi attributed this to “enhanced agricultural productivity, a resilient services sector, and the ongoing implementation of policy measures under the Government’s Bottom-Up Economic Transformation Agenda (BETA).”
On macroeconomic stability, Mbadi highlighted significant improvement across key indicators. “Inflation has declined to 3.8 percent in May 2025 from a peak of 9.6 percent in October 2022,” he said.
“The Kenya Shilling has stabilized against major international currencies, and interest rates have come down with the easing of monetary policy.”
The 2025/26 fiscal policy, Mbadi said, is geared towards supporting government priorities under BETA and the Fourth Medium-Term Plan (MTP IV) through a growth-oriented fiscal consolidation plan.
“We will continue efforts to mobilize domestic revenue and rationalize expenditure, while safeguarding essential programmes and social spending,” he stated.
The Treasury plans to reduce the fiscal deficit from 5.3 percent of GDP in FY 2023/24 to 2.7 percent by FY 2028/29. The Present Value of the debt-to-GDP ratio is also expected to fall toward the 55 percent anchor.
“This will be supported by sustained fiscal consolidation and key structural reforms,” Mbadi told MPs.
