Kenya has launched its 31st Economic Update and Public Finance Review, reaffirming its commitment to sound fiscal management and inclusive economic recovery amid local and global challenges. The event, held at the University of Nairobi on Tuesday, was presided over by Cabinet Secretary for the National Treasury and Economic Planning, John Mbadi.
Mbadi underscored the government’s resolve to implement strategic reforms under the Bottom-Up Economic Transformation Agenda, aimed at reducing the cost of living, creating jobs, and fostering inclusive growth.
“At the heart of our agenda is the commitment to strengthen economic activity and ensure fiscal sustainability,” said Mbadi. He emphasized that the 2025 Finance Bill introduces no new taxes, reflecting public sentiments expressed during last year’s protests.
The update highlighted Kenya’s GDP growth of 5.7 percent in 2023 and 4.7 percent in 2024, with forecasts indicating a rebound to 5.3 percent in 2025 and 2026. This performance is attributed to resilience in the agriculture and services sectors, improved foreign exchange reserves, and reduced inflation, which stood at 4.1 percent in April 2025.
Key priorities identified in the report include enhancing public debt management, increasing domestic revenue, digitizing pensions, and adopting zero-based budgeting. Mbadi called on the World Bank and development partners to collaborate more with local academic institutions to ensure policy recommendations align with Kenya’s unique socio-economic realities.
World Bank Division Director for Kenya, Rwanda, Somalia, and Uganda, Qimiao Fan, praised Kenya’s fiscal reforms and data-driven policy approach. “The World Bank’s current portfolio in Kenya includes 25 national and 7 regional projects worth USD 6.4 billion,” he noted.
Senior Economist Naomi Mathenge, who presented the report, warned of a slowdown across all sectors, particularly industry, due to high interest rates. She called for a more inclusive and efficient fiscal policy to navigate the shrinking fiscal space.
The report emphasized macroeconomic resilience, reduced poverty, streamlined tax incentives, and digitized revenue systems as critical to fiscal transparency and economic sustainability. The launch reaffirmed the government’s drive toward a transparent, inclusive, and evidence-based approach to economic planning.
