Kenya’s Economy Poised to Grow 4.9 – 5.2 Percent in 2026, KEPSA Forecasts

Kenya, February 02, 2026 - Kenya’s economy is expected to strengthen in 2026, with growth projected between 4.9 percent and 5.2 percent, according to a forecast presented by the Kenya Private Sector Alliance (KEPSA) in partnership with the Nairobi Securities Exchange (NSE) and KPMG at the 2026 Economic Outlook Forum. 

The projection signals a moderating recovery trajectory after slower expansion in previous years and suggests improving macroeconomic momentum, though challenges remain. 

CEOs and private-sector leaders emphasised that the economy is stabilising, supported by declining inflation, resilient domestic demand and a rebound in key sectors, even as businesses navigate persistent global uncertainty, supply-chain pressures and fiscal pressures. 

KEPSA Vice Chair Brenda Mbathi noted that while Kenyan economy growth remains below pre-pandemic historical averages of about 6 percent, the forecast reflects “a resilient bounce back” supported by improved performance across services, agriculture and construction. 

The 4.9 – 5.2 percent growth projection draws on recent official data showing real GDP expansion of about 4.9 percent in the third quarter of 2025, up from 4.2 percent in the same period of the previous year, a trend driven by strong contributions from agriculture, construction and transport sectors. 

Inflation has eased significantly since earlier macro pressures, falling into a stable range that supports consumer demand and business planning.

Agriculture and related activities have remained resilient, benefiting from favourable weather conditions and expanded food production.

A rebound in construction and infrastructure projects has helped sustain activity in sectors previously weighed down by cash-flow constraints.

Monetary policy easing and accommodative credit conditions have supported private-sector borrowing in key segments such as trade, consumer durables and agriculture. 

Analysts also point to strengthening private sector credit growth, which climbed after a period of contraction, and a more conducive lending environment as contributing to improved aggregate demand. 

While growth is forecast to improve, Kenya’s broader macroeconomic picture remains mixed:

Inflation has declined from double-digit levels earlier in the decade and remained within the Central Bank’s target range in late 2025, supporting household purchasing power.