The Mastercard Economics Institute projects a 4.7% GDP growth for Kenya in 2025, with consumer spending increasing by 4% and inflation stabilizing at 4.8%. Key drivers include high remittances and women’s workforce participation. The report highlights Kenya’s resilience and digital advancements as positive indicators for sustainable growth despite global economic challenges.
The Mastercard Economics Institute’s ‘Economic Outlook 2025’ report suggests that Kenya’s economy is on a promising trajectory, forecasting a GDP growth of 4.7% for the year, surpassing the global average of 3.2%. Consumer spending is expected to increase by 4%, with consumer price inflation stabilizing at 4.8%, providing much-needed relief to households and businesses.
Key drivers of this economic growth include a thriving remittance ecosystem and high women’s participation in the labor force. Significant remittance inflows bolster household incomes, while innovations in digital payments enhance economic activities. The report outlines Kenya’s resilience amid global economic changes and its ability to leverage technology and regional trade for sustainable growth.
According to Khatija Haque, Mastercard’s Chief Economist for EEMEA, the outlook emphasizes Kenya’s potential for robust economic advancement, highlighting factors such as high remittance inflows, active female workforce participation, and digital transformation. Shehryar Ali, Senior Vice President and Country Manager for East Africa, pointed out the rapid digital evolution in Kenya, asserting that Mastercard is committed to advancing this transformation through innovative payment solutions.
The report also addresses global pricing trends. Although inflation has significantly slowed, prices remain elevated, influencing consumer behavior and encouraging households to opt for more affordable products. This trend aligns with Kenya’s projected real consumer spending growth, expected to mirror global purchasing behaviors by growing at 4% in 2025.
Migration continues to impact Kenya’s economy, with substantial remittance flows providing essential support for lower-income communities. Remittances represented 3.9% of GDP in 2023, a significant increase from pre-pandemic levels. The country’s advanced mobile money systems, like M-Pesa, facilitate secure cross-border transactions and enhance financial accessibility for underserved populations.
In addition, the report highlights the rise of the SHEconomy, noting increased workforce participation among women following the pandemic. Kenya recorded a female labor force participation rate of 72.5% in 2022, attributable to job creation in female-oriented sectors and the advent of flexible work policies that support working mothers. This trend is expected to contribute positively to economic growth by increasing disposable incomes and fostering higher consumer spending as we approach 2025.
In summary, the Mastercard Economics Institute’s ‘Economic Outlook 2025’ report suggests a promising trajectory for Kenya’s economy, with notable growth in GDP, consumer spending, and female workforce participation. The ongoing digital transformation and robust remittance influxes position Kenya favorably against global economic challenges. These dynamics are expected to sustain progress and enhance overall economic resilience in the coming year.
Original Source: www.africa.com
