The World Bank lifted its forecast for Kenya’s economic growth, noting a faster than expected recovery in the construction sector.
East Africa’s largest economy is now anticipated to grow on average by 4.9% between 2025 and 2027, up from an earlier projection of 4.5%.
Floods, high interest rates, and subdued business sentiment following anti-government protests contributed to an economic slowdown earlier this year. But inflation is now within target, the currency is stable, and foreign exchange reserves are at record highs, the World Bank said.
The country still faces fiscal pressures, however: Public debt has risen to 68.8% of GDP and Kenya remains at “high risk of debt distress.” On Tuesday, Kenya’s Treasury said a $690 million shortfall in expected tax receipts in the three months to September was due to the pushback from youth protests against new taxes in the Finance Act.