In a clear show of optimism, NCBA Group has forecasted Kenya’s GDP growth to remain steady at 4.8 per cent through 2024 and 2025, driven by stabilising economic conditions and favourable fiscal measures.

This projection was shared at today’s NCBA Economic Forum themed “Navigating Uncertainty – Key Trends Influencing the Economic and Business Environment in 2025,” which convened over 700 stakeholders from Kenya's economic and business sectors.

NCBA Group Managing Director John Gachora shed light on the country’s economic strides since grappling with last year’s financial crises.

“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 said.

Reflecting on a period of severe currency instability, he added, “Since then, the currency crisis has receded, bringing a welcome stability across Kenya’s financial markets.”

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A mix of domestic and global factors is expected to underpin the projected growth. Lower inflation rates globally are providing relief, with the International Monetary Fund (IMF) forecasting global GDP to rise from 3.1 per cent in 2024 to 3.3 per cent in 2025, while the global Purchasing Managers’ Index (PMI) signals steady economic activity worldwide.

On the domestic front, Kenya’s agricultural and agro-processing sectors are benefitting from favourable weather, with increased agricultural exports helping to ease food inflation.

Resilience in the service sector also remains crucial, with sub-sectors projected to grow near long-term averages, enhancing economic stability.

However, fiscal challenges loom as debt interest payments are projected to consume 38 per cent of tax revenue in the 2024/25 fiscal year, before slightly easing to 35 per cent in 2025/26.

This burden restricts funds for development projects, which poses a hurdle for long-term growth. Additionally, unpredictable tax policies and substantial pending bills, totalling Sh516 billion for the national government and Sh182 billion for counties, continue to impact private sector liquidity and economic stability.

David Ndii, Chairperson of the President’s Council of Economic Advisors, voiced optimism for the coming year, highlighting a positive inflation outlook, strong forex reserves, and enhanced export performance.

He projected affordable housing, domestic energy, electric vehicles, and sustained agricultural productivity as essential growth drivers, underlining the need to raise national investment to 25 per cnet of GDP.

According to Ndii, this increase would be fuelled by expanded private partnerships, greater savings, and financial deepening across the economy.

Since its inauguration in 2018, the NCBA Economic Forum has served as a critical platform to foster dialogue between the government and industry leaders, igniting conversations on pathways to economic growth.

This year’s ninth edition saw contributions from prominent figures such as Mary-Ann Musangi, Chairperson of the Women in Manufacturing Committee at the Kenya Association of Manufacturers, and Sandeep Main, Partner in Tax and Regulatory Services at KPMG.

As Kenya navigates these evolving economic trends, stakeholders remain committed to seizing emerging opportunities while addressing structural challenges that could impact growth sustainability.