AfDB projects Kenya’s economy to grow by 4.6%

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Kenya’s economy is projected to grow by 4.6 percent in 2026 before improving slightly to 4.7 percent in 2027, according to a new report released by the African Development Bank (AfDB) on Tuesday.

In its Country Focus Report (CFR) 2026, the AfDB said Kenya’s economy expanded by an estimated 5 percent in 2025, but growth is expected to slow this year due to increased global uncertainty and rising fuel prices.

The lender noted that Kenya’s projected growth remains below the East African regional average, which is forecast at 5.9 percent in 2026 and 6.4 percent in 2027. It attributed the difference to stronger economic performance in several neighbouring countries.

Despite the expected slowdown, the AfDB projects Kenya’s inflation rate to rise moderately to 5.4 percent in 2026, remaining within the Central Bank of Kenya’s (CBK) target range of 2.5 percent to 7.5 percent.

The report identifies several short-term risks that could weigh on Kenya’s economic performance, including adverse weather conditions, high global interest rates, volatile commodity prices, exchange rate pressures and ongoing geopolitical tensions.

According to the AfDB, these factors could slow economic growth, widen the country’s fiscal and external deficits and increase the cost of financing.

The bank also warned that political uncertainty ahead of Kenya’s 2027 General Election could affect investor confidence and slow the implementation of key economic reforms.