WORLD BANK CUTS KENYA'S 2025 GROWTH PROJECTION TO 4.5%

The World Bank has lowered Kenya’s economic growth forecast for 2025 from 5 percent to 4.5 percent.

It was announced in June by the Washington-based lender, citing tighter global financial conditions, rising fiscal pressures, and slow private sector activity.

Kenya’s 2026 forecast was also trimmed by 20 basis points to 4.9 percent, raising concerns about the country’s ability to maintain economic recovery amid internal and external shocks.

The revision follows a move by the Central Bank of Kenya’s Monetary Policy Committee (MPC) to cut the benchmark lending rate by 50 basis points to 9.75 percent.

CBK Governor Kamau Thugge said the decision was aimed at encouraging bank lending to the private sector and supporting economic activity.

“There was scope for a further easing of the monetary policy stance,” he said, “to ensure inflation expectations remain anchored and the exchange rate stays stable.”

The Central Bank’s move highlights growing concern over reduced credit access, weak demand, and a high cost of living.

Kenya is also facing mounting pressure to manage its rising public debt and attract more foreign investment as global geopolitical tensions persist.

The World Bank report shows that Kenya’s downgrade is part of a wider trend in Sub-Saharan Africa.

Botswana’s 2025 forecast was cut by 3 percentage points, while Mozambique saw a 2.9-point drop.

In contrast, Tanzania and Uganda maintained growth projections above 5.5 percent, with no major revisions.