Kenya to Grow Steadily Despite Economic Shocks, Cytonn

Nairobi — Kenya’s economy is expected to experience moderate growth in 2025, according to Cytonn Investment’s latest market outlook.

The firm has forecasted a GDP growth rate of between 5 percent and 5.4 percent, with key sectors such as agriculture, services, and tourism anticipated to drive the expansion.

The report highlights that the agricultural sector, in particular, will play a pivotal role in boosting economic output.

A rebound in business activity across industries, especially in information technology and accommodation services, is also expected to provide a substantial contribution.

The growth in these sectors is anticipated to be bolstered by a recovery in the tourism industry, which will continue to benefit from the country’s appeal as a travel destination.

However, Cytonn remains cautious about potential headwinds.

The report flags concerns over Kenya’s mounting public debt and the possibility of inflationary pressures, which could pose risks to the broader economic environment.

“The key downside to this growth shall be the high risk of debt distress and a possible uptick in inflationary pressures,” read the report in part.

The firm has noted the possibility of a rise in inflation, with the annual average expected to reach 5.3 percent, slightly higher than 2024’s rate of 4.5 percent.

While the inflation rate is expected to remain within the government’s target range of 2.5 percent to 7.5 percent, the impact of rising inflation remains a key risk factor.

Last year, Kenya’s annual inflation rate scaled up in two successive months, with December recording 3 percent, up from 2.8 percent in November.

It, however, eased at the lower end of the central bank’s target range of 2.5 percent to 7.5 percent.

The scale-up was majorly driven by high food prices as well as increased transport costs in defiance of a steadying shilling.

ADVERTISEMENT