Kenya’s economy demonstrated remarkable resilience in 2024, posting a 4.7% growth in real GDP despite headwinds in key sectors, a 2025 Economic Survey by the KNBS reveals.
This performance, though slightly lower than the revised 5.7% growth recorded in 2023, showcases the nation’s economic durability amidst global uncertainties.
The agriculture sector, the backbone of Kenya’s economy, expanded its contribution to GDP from 21.5% to 22.5%, growing at 4.6%. This growth underscores the sector’s pivotal role as the country’s economic foundation, though it fell short of the impressive 6.6% growth seen in 2023.
Financial services emerged as the standout performer, with the Financial & Insurance Activities sector surging by 7.6%. Real Estate followed with a robust 5.3% growth, while Transportation and Storage registered a respectable 4.4% expansion.
Not all sectors shared in the prosperity, however. Construction experienced a 0.7% contraction, reversing its 3.0% growth from the previous year. More dramatically, mining and quarrying continued its downward spiral, contracting by 9.2% compared to a 6.5% decline in 2023, reflecting reduced production across key minerals including construction materials and titanium.
On the employment front, Kenya added 782,300 new jobs in 2024, with the informal sector generating 90% of these opportunities. The formal sector showed modest growth of 2.4%, creating 78,600 jobs, while the overall wage bill increased by 7.2% to KSh 2,998.8 billion.
Perhaps most encouraging was the significant easing of inflation to 4.5% from 7.7% in 2023—the lowest level in five years. This was primarily attributed to favorable weather conditions that helped stabilize food prices. Transportation costs also moderated considerably, with the transport index easing to 5.0% from 12.2% in 2023.
In response to the economic climate, Kenya’s Central Bank lowered its benchmark rate to 11.25% by December 2024, down from 12.50% a year earlier, signaling a supportive monetary policy stance. Despite this reduction, commercial bank interest rates rose to 16.89%.
The capital markets showed remarkable vigor, with market capitalization surging by 34.8% to KSh 1,939.7 billion. Similarly, the life insurance sector demonstrated strong growth, with gross premium income increasing by 18.5% to KSh 201.6 billion.
As Kenya navigates the complex global economic landscape, this balanced growth across multiple sectors suggests a diversified economy capable of weathering challenges while creating opportunities for continued expansion in 2025.
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