Kenya's Economy to Grow 4.9-5.2pc in 2026, Kepsa

Nairobi — Kenya's economy is showing signs of stabilisation in 2026, with GDP projected to grow between 4.9 and 5.2 per cent, but experts warn that external shocks and global uncertainties could temper the recovery.

The 2026 Economic Outlook Forum, hosted by the Kenya Private Sector Alliance (KEPSA) in partnership with the Nairobi Securities Exchange (NSE) and KPMG, highlighted a cautiously optimistic landscape for businesses after a period of slower growth in 2024.

Analysts noted that inflation has moderated to a manageable 3-5 per cent range, while the shilling shows relative stability, creating a more predictable operating environment.

"Businesses are operating in a landscape marked by global uncertainty, shifting trade dynamics, and rapid technological transformation," said KEPSA Vice Chair Brenda Mbathi.

"Yet within these challenges lie significant opportunities. The private sector remains central to unlocking inclusive growth through investment, job creation, and productivity."

Despite the positive indicators, the forum underscored persistent vulnerabilities.

Food and fuel prices remain exposed to global market swings, while fiscal pressures and rising compliance costs could weigh on domestic investment.

Analysts also pointed to the ripple effects of US-China technology tensions and rare-earth export disputes, which continue to test supply chains across Africa.

"In Africa, growth is projected to rise modestly from 3.9% in 2025 to 4.1% by 2027," said Sandeep Main, Tax Partner and Head of Private Enterprise in Africa at KPMG, emphasizing the importance of strategic sourcing and risk mitigation.

NSE Chief Executive Frank Mwiti highlighted domestic financing challenges, urging Kenyan businesses to tap the capital markets to fund expansion.

"Capital has a memory. It remembers markets that opened when things were hard and those who chose transparency and integrity," Mwiti said.

According to the forum while Kenya's macroeconomic fundamentals are stabilising, the path to pre-pandemic growth levels of six per cent will require agility, innovation, and a proactive approach to both external shocks and domestic fiscal pressures.

Read the original article on Capital FM.