Kenya’s economy hits Ksh. 17.6 Trillion amidst Global headwinds

The Kenya National Bureau of Statistics (KNBS) has released its dual flagship reports, the 2026 Economic Survey and the 2026 Facts and Figures.

Kenya’s economy recorded a real GDP growth of 4.6% in 2025, a marginal cooling from the 4.7% seen in 2024. Despite this slight deceleration, the total value of the economy at market prices reached Ksh. 17.6 trillion, with GDP per capita rising to $2,549.

Macroeconomic stability was a defining feature of the past year. Overall inflation eased to an average of 4.1% in 2025, though April 2026 data shows a slight uptick to 5.6%. This cooling trend allowed the Central Bank of Kenya to adopt a more accommodative stance, lowering the base lending rate to 9.00%. This was bolstered by a resilient Kenyan Shilling, which averaged Ksh. 129.3 against the US Dollar throughout 2025, providing a much-needed anchor for import costs and debt servicing.

A significant portion of the 2026 reports focuses on the physical transformation of the country. Infrastructure remains a primary driver of both public expenditure and sectoral growth:

• Roads: The national paved road network has expanded to 25,412 kilometres. In the last fiscal cycle alone, the government channeled KSh 168.7 billion into road development and maintenance.
• Railway & Logistics: The Standard Gauge Railway (SGR) achieved a landmark year, with revenues hitting Ksh. 21.4 billion, reflecting increased efficiency in freight and passenger movement.
• Green Energy: Kenya has maintained its global standing in renewable energy. Over 90% of the 15,067 GWh generated in 2025 came from renewable sources, with Geothermal and Hydro power leading the transition. Notably, electricity demand for e-mobility surged by 152.5%.

The 2026 data highlights a pivot toward heavy investment in human capital and environmental stewardship:

• Healthcare: The transition to the Social Health Authority (SHA) is well underway, with over 29 million Kenyans registered by early 2026. This is supported by an expanded network of 16,713 operational health facilities.
• Education: Total expenditure on education is projected to reach Ksh. 702.1 billion for the 2025/26 fiscal year. The system successfully managed a high-stakes transition for 1.13 million Grade 9 students under the new Competency-Based Curriculum (CBC).
• Environment: Kenya’s total forest area reached 5.23 million hectares, bringing the national tree cover to 12.13%. However, the report notes mixed results in wildlife conservation, with some predator populations showing a decline despite overall stable numbers for elephants and rhinos.

While Mining and Quarrying was the fastest-growing sector at 14.9% (driven by the building boom) and Tourism sustained a 15.6% recovery, the labor market continues to present a structural challenge.

The economy generated 824,100 new jobs in 2025. However, the Employment Paradox remains: the informal sector continues to be the dominant engine of the economy, employing 18.1 million people, or 83.8% of the total workforce. In contrast, the modern formal sector accounts for only 3.5 million jobs.

2026 Economic Indicators at a Glance