The International Monetary Fund Headquarters in Washington, DC.
The International Monetary Fund (IMF) has lowered its gross domestic product (GDP) growth forecast for Kenya for 2025 to five per cent in light of the possible financial challenges occasioned by the anti-tax riots that led to the rejection of the Finance Bill, 2024.
In April, the IMF had projected the country’s real GDP to grow 5.3 per cent, on the back of the easing in consumer prices and declining interest rates, which were to be supported by increased State spending.
However, in its latest world economic outlook, Kenya's real GDP growth for 2025 was revised downwards even as the multilateral financier maintained the economic growth for this year at five per cent. Kenya’s growth revision for 2025 mirrors that of the sub-Saharan Africa region, which has been revised downward by a 0.2 percentage point for 2024 and upward by a 0.1 percentage point for 2025.
“Besides the ongoing conflict that has led to a 26 per cent contraction of the South Sudanese economy, the revision reflects slower growth in Nigeria, amid weaker-than-expected activity in the first half of the year,” said the IMF.
It projects sub-Saharan Africa growth to increase from an estimated 3.6 per cent in 2023 to 4.2 per cent in 2025, “as the adverse impacts of prior weather shocks abate and supply constraints gradually ease.”
Kenya’s faster growth of 5.6 per cent last year compared to 4.9 per cent in 2022 was largely due to favourable weather, which boosted the agricultural sector, the country’s economic mainstay.
