Kenya launches 31st economic update and public finance review
- Kenya has been lauded for its fiscal consolidation efforts and commitment to implementing data-driven policies. However, it was noted that the conomy had slowed down significantly across all sectors.
Kenya has launched the 31st edition of the Kenya Economic Update and the Public Finance Review Report, with a renewed commitment to inclusive fiscal policy, sustainable growth and economic resilience.
The Cabinet Secretary (CS) for the National Treasury and Economic Planning, John Mbadi said Kenya remains committed to sound fiscal policy and economic recovery through strategic reforms and effective public finance management, despite ongoing global and local fiscal challenges.
“At the heart of our Bottom-Up Economic Transformation Agenda is the commitment to strengthen economic activity by bringing down the cost of living, creating jobs and fostering inclusive growth,” said Mbadi.
The CS made the remarks on Tuesday at the launch, held at the University of Nairobi which brought together senior government officials, development partners, representatives from the International Monetary Fund and International Finance Corporation, the diplomatic community, economists, students and academicians.
Mbadi said the report was vital as it addresses need to enhance public debt management, increase domestic revenue collection and promote efficient spending through e-procurement and have digitalized pension systems and zero-based budgeting.
He at the same time affirmed that the National Treasury has not introduced new taxes in the Finance Bill 2025, which he said considered public sentiments following last year’s protests.
Mbadi urged World Bank and other development partners to continue engaging with local academic and research institutions to ensure that policy recommendations reflect Kenya’s unique context and realities. “Together, let us work towards a future where economic growth is inclusive, equitable and sustainable,” said the CS.
Regarding Kenya’s current economic performance, Mbadi revealed that the country recorded a gross domestic product growth rate of 5.7 percent in 2023 and 4.7 percent in 2024, with projections showing an upward trend to 5.3 percent in 2025 and 2026.
He credited the performance to resilience in the agriculture and services sectors, improved foreign exchange reserves and a decline in inflation to 4.1 percent as of April 2025.
In his remarks, the World Bank Division Director for Kenya, Rwanda, Somalia and Uganda, Mr Qimiao Fan lauded Kenya for its fiscal consolidation efforts and commitment to implementing data-driven policies.
“World Bank Division’s current portfolio in Kenya includes 25 national and 7 regional projects valued at USD 6.4 billion,” said Oimiao.
Presenting the economic update at the event, Naomi Mathenge, a senior economist, announced that Kenya’s economy has slowed across all sectors, particularly in the industry sector which she attributed to the high interest rates that have dampened domestic demand.
She emphasized that for the economy to improve, there should be a more inclusive and efficient fiscal approach amid the shrinking fiscal space and increased demand for public investment.
Key highlights in the report include macroeconomic resilience, high domestic borrowing, poverty reduction and inclusive growth in budget policy and recommendations to streamline tax incentives and digitizing revenue systems to curb leakages.
The event marked a significant milestone in Kenya’s pursuit of a transparent, inclusive and evidence-driven approach to fiscal management, anchored in collaboration between government, academia and development partners.
