The Kenyan economy is projected to grow by 4.8 percent in 2024 and remain consistent into 2025, according to the NCBA Economic Forum 2024.
The expected growth will be supported by a rebound in the agriculture and service sectors, as well as favourable global economic conditions, including low inflation rates and a strengthening global GDP.
“Favorable weather continues to boost agricultural exports, positively impacting food inflation.The service sector is expected to maintain resilience, with most sub-sectors projected to grow at near long-term average rates,” NCBA noted.
The lender, however, notes that growth will be slowed by public debt, which is expected to consume 38 percent of tax revenue in 2024/25, rising and unpredictable tax and statutory deductions, and high pending bills both in the national and county governments.
Speaking on the projected trajectory, the Chairperson of the President’s Council of Economic Advisory David Ndii expressed his optimism for the coming year, highlighting a favorable inflation outlook backed by strong forex reserves, a robust export performance and improved capital flows following a decline in global interest rates.
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Looking ahead, he identified affordable housing, domestic energy, electric vehicles, and sustained agricultural productivity as key areas that will drive the economy’s growth.
To support growth, Ndii emphasized the need to raise national investment to 25 percent of GDP, driven by increased savings, expanded private partnerships, and financial deepening.
NCBA Group Managing Director, John Gachora noted that in the previous year, the country was in the throes of a financial crisis brought about by a potential sovereign debt default with the maturity of the June 2024 Eurobond.
A raging currency crisis further exacerbated those concerns and an unprecedented tight external environment that locked Kenya out of international capital markets.
“Kenya acted decisively to resolve its exceptional financing needs for the June 2024 Eurobond maturity, well ahead of schedule, which significantly eased sovereign spreads,” Gachora noted.
“Since then, the currency crisis has receded, bringing a welcome stability across Kenya’s financial markets,” he added.
