Kenya's economy has shown positive trends so far this year. After several years of sluggish growth, inflationary pressure and public debt concerns, the early signs of recovery provide a much-needed sense of cautious optimism.
Most macro-economic indicators point toward gradual improvement. Inflation has remained within the target range of 2.5 per cent to 7.5 per cent, recoded at 4.6 per cent in September.
The Kenyan shilling has stabilised against major currencies, key sectors such as agriculture and manufacturing are reporting modest gains with the economy estimated to have expanded by five per cent in the second quarter of 2025, compared to 4.6 per cent same quarter of 2024.Fiscal consolidation efforts and structural reforms aimed at improving revenue collection and reducing wasteful expenditure is slowly taking shape.
Interest rates have in recent months eased on CBK’s intervention, which has eased the cost of credit.
However, optimism must be tempered with realism. The high cost of living is still a major concern for ordinary Kenyans, unemployment remains stubbornly high particularly among the youth.
Companies are laying off, some are shutting down including SMEs, blamed on high cost of doing business. Historical pending bills have strained businesses with some unable to continue operating optimally.
While business conditions began to recover across the private sector in September, as per the latest PMI, sales for most of these entities remain low as a result of reduced disposable income.
For the gains to be sustained, the government must stay the course on reforms while ensuring inclusive growth. Kenyans need to feel the impact, people need money in their pockets and businesses need to thrive if the numbers are to make meaningful sense.
Transparency and accountability must also be at the centre of economic growth as demanded by Kenyans, led by the Gen Z.
The government should also ensure that protection of vulnerable populations is central to the economic recovery agenda. No one should be left behind.
