The Mastercard Economics Institute forecasts a 4.7% GDP growth for Kenya in 2025, with 4% consumer spending growth and 4.8% inflation stabilization. Strong remittances and high female workforce participation contribute to economic resilience and digital transformation in the country.
The Mastercard Economics Institute has released its annual report, the ‘Economic Outlook 2025’ for Kenya, predicting notable economic growth. The report highlights an expected GDP growth of 4.7% in 2025, bolstered by a 4% rise in consumer spending and a stabilization of consumer price inflation at 4.8%. These indicators suggest an optimistic economic landscape for households and businesses in Kenya, particularly in comparison to anticipated global figures.
Kenya’s economic resilience is attributed to its strong remittance ecosystem and significant female labor force participation. High remittance inflows play a crucial role in increasing household incomes, while women’s active participation in sectors such as healthcare and education contributes to economic stability. The nation also benefits from technological advancements and regional trade integration, which help in maintaining robust economic progress.
Khatija Haque, Chief Economist for EEMEA at Mastercard, stated, “Kenya’s economic outlook for 2025 highlights its potential for robust growth, underpinned by high remittance inflows, active female workforce participation, and digital transformation. These trends position the country as a leader in fostering inclusive and sustainable development.”
Shehryar Ali, Senior Vice President and Country Manager for East Africa at Mastercard, emphasized the country’s rapid digital evolution, saying, “Kenya’s digital evolution is accelerating at a fast pace, and Mastercard is committed to driving this transformation. As the ‘Silicon Savannah,’ Kenya leads in innovation.”
Key findings from the report indicate that inflation has stabilized at 4.8% in Kenya, reflecting broader global trends. Although inflation rates have slowed down, pressure remains on consumers, particularly in essential sectors. This consumer behavior may lead to an increase in demand for more affordable goods, as projected real consumer spending growth reaches 4% in 2025.
Migration trends have also shifted economic patterns, with remittances now accounting for 3.9% of Kenya’s GDP, a significant increase from pre-pandemic levels. The continued digitization of payment systems enhances the efficiency and convenience of these remittances, particularly through mobile platforms like M-Pesa.
Furthermore, the ‘SHEconomy’ trend highlights increased female labor participation rates in Kenya. In 2022, the female participation rate was an impressive 72.5%, attributed to job growth in sectors dominated by women and the flexibility of remote work. This trend is expected to positively impact household disposable incomes and consumption growth in 2025.
Overall, the ‘Economic Outlook 2025’ report presents a comprehensive analysis of Kenya’s economic trajectory, considering various datasets to provide reliable estimates of future activities.
In summary, the Mastercard Economics Institute’s 2025 Economic Outlook for Kenya presents a promising picture of economic growth, driven by favorable GDP forecasts, high consumer spending, and a stabilizing inflation rate. The increasing remittance inflow, coupled with the robust participation of women in the workforce, underscores the resilience of the Kenyan economy. Continued digital innovation will further empower Kenya’s economic landscape as it progresses towards sustainable and inclusive development.
Original Source: www.africa.com
