Kenya Economy to Grow 5.0% in 2026 After Subdued 2025 Performance

Kenya's economy grew by 4.6% in 2025, edging slightly below the 4.7% recorded in 2024, as a combination of erratic weather patterns, weak manufacturing activity and subdued consumer demand held back overall output. The National Treasury's Finance Ministry projects a rebound to 5.0% growth in 2026 and a further acceleration to 5.2% in 2027.

Agriculture Bears the Brunt of Climate Pressure

Agriculture remains the single largest sector in Kenya's economy, contributing an estimated 23.2% of GDP. Yet it was also among the biggest drags on 2025 growth, expanding by just 2.8%. Wheat production fell by 18.2% year on year. Tea contracted by 7.8%. Sugarcane suffered the sharpest decline at 24.7%.

Manufacturing Struggles to Build Momentum

Kenya's manufacturing sector grew by just 2.0% in 2025, down from 3.0% in 2024. Weak domestic demand, persistent logistics bottlenecks at the port of Mombasa and high energy costs were among the main constraints.

The Path to 5% and Beyond

The Finance Ministry's 5.0% growth forecast for 2026 rests on a services sector recovery, particularly in financial services, ICT, retail and tourism. A potentially transformative factor is China's recent decision to remove import duties on most African goods. The African Development Bank is more measured, forecasting 4.6% growth for Kenya in 2026.