Global inflation eased to 5.7 per cent in 2024, down from 6.7 per cent in 2023, driven by stabilising commodity prices and improved labour supply, according to the Economic Survey 2025. Inflation returned to target levels in many economies, although several Sub-Saharan African countries, including Angola, Ethiopia and Nigeria, continued to grapple with double-digit inflation.
The global economy showed signs of recovery, with international trade rebounding by 3.4 per cent, supported by strong growth in business services, tourism and renewed consumption of goods from the United States. Labour market conditions remained steady, with the global unemployment rate holding at 5.0 per cent and labour force participation unchanged at 61.0 per cent in both 2023 and 2024.
Kenya’s economy grew by 4.7 per cent in 2024, slower than the revised growth of 5.7 per cent recorded in 2023. Growth was observed across most sectors, led by Financial and Insurance Activities (7.6%), Real Estate (5.3%), Transportation and Storage (4.4%), and Agriculture, Forestry and Fishing, which expanded by 4.6 per cent.
However, the construction sector contracted by 0.7 per cent, reversing a 3.0 per cent growth in 2023, while mining and quarrying declined by 9.2 per cent due to reduced production of key minerals such as construction materials, titanium, salt and gemstones.
Nominal GDP rose to KSh 16.22 trillion in 2024 from KSh 15.03 trillion in 2023, with agriculture contributing 22.5 per cent of GDP. Services remained the backbone of the economy, accounting for 61.1 per cent of GDP, while industry-related activities contributed 16.5 per cent. GDP per capita increased to KSh 309,460 in 2024 from KSh 291,770 the previous year.
Private final consumption expenditure rose to KSh 12.48 trillion, while government consumption increased to KSh 1.81 trillion, reflecting sustained domestic demand.
Employment in the modern and informal sectors rose to 20.8 million in 2024 from 20.0 million in 2023, with the economy creating 782,300 new jobs. The informal sector accounted for 90 per cent of new jobs created, excluding small-scale agriculture.
The nominal wage bill grew by 7.2 per cent to KSh 2.99 trillion, while average annual earnings increased to KSh 933,100. However, real average earnings declined slightly, reflecting the lingering impact of inflation.
Inflation eased significantly to 4.5 per cent in 2024 from 7.7 per cent in 2023, the lowest level recorded in five years. This was largely attributed to reduced food prices following favourable weather conditions. Prices of maize grain dropped by 19.3 per cent, while sugar recorded a negative inflation rate of 10.7 per cent.
To support economic activity, the Central Bank of Kenya lowered the Central Bank Rate to 11.25 per cent in December 2024 from 12.50 per cent a year earlier. The 91-day Treasury bill rate declined sharply to 10.32 per cent, while interbank rates also eased.
Broad money supply (M3) stood at KSh 6.11 trillion in December 2024, while credit to the national government increased by 13.9 per cent. In contrast, credit to the private sector declined by 1.1 per cent, reflecting tighter lending conditions.
The capital markets recorded a strong rebound, with market capitalisation rising by 34.8 per cent to KSh 1.94 trillion. The insurance and pension sectors also expanded, with pension fund assets growing by 20.3 per cent to KSh 2.21 trillion.
National government revenue is projected to grow by 13.4 per cent to KSh 3.12 trillion in 2024/25, while expenditure is expected to rise to KSh 3.98 trillion, resulting in a budget deficit of KSh 862.7 billion. Public debt stood at KSh 9.96 trillion by the end of June 2024.
Kenya’s merchandise trade grew by 5.5 per cent to KSh 3.82 trillion in 2024. Export earnings rose by 10.4 per cent, outpacing imports, leading to a slight improvement in the trade deficit and a narrowing of the current account deficit to KSh 208.9 billion.
The agriculture sector recorded improved performance, supported by increased crop yields and livestock production. Tea, sugarcane, milk and coffee output rose, while maize production declined due to erratic short rains. Food security indicators improved, with the self-sufficiency ratio rising to 105.5 per cent.
Manufacturing grew by 2.8 per cent, driven by agro-based industries, particularly sugar production. Tourism rebounded strongly, with international arrivals increasing by 14.7 per cent to 2.39 million visitors.
In the energy sector, lower global oil prices and a stronger shilling reduced the petroleum import bill by 8.1 per cent. Renewable energy dominated electricity generation, accounting for over 91 per cent of domestic output.
Overall, the Economic Survey 2025 paints a picture of a stabilising global environment and a resilient Kenyan economy, albeit facing sectoral challenges and slower growth, as policymakers balance recovery, fiscal pressures and long-term sustainability.
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