Estudos Económicos


Population 46.7 million
GDP 1,695 US$
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major macro economic indicators


  2016 2017 2018 (e) 2019 (f)
GDP growth (%) 5.9 4.9 6.1 5.7
Inflation (yearly average, %) 6.3 8.0 4.7 5.5
Budget balance (% GDP)* -7.7 -8.6 -7.1 -6.3
Current account balance (% GDP) -5.2 -6.6 -5.5 -5.3
Public debt (% GDP) 52.3 55.7 57.1 56.9

(e): Estimate. (f): Forecast. *Fiscal year from 1st July - 30th June 2019 data: FY18/19.


  • East Africa’s leading economy, playing a pivotal role in the East African Community, the number-one African common market
  • Diversified agriculture and expanding services sector (telecommunications and financial services)
  • Improving business and governance climate
  • Fast-growing population and emerging middle class


  • Dependent on hydropower and rain-fed agriculture
  • Persistent bottlenecks and skills shortages
  • Instability related to terrorist risk and political, social and ethnic divisions
  • Persistent corruption


Despite some constraints, growth remains robust

With the fading effect of the political uncertainty and poor weather conditions that held it back in 2017, growth rebounded in 2018. In 2019, growth is expected to remain robust, supported in particular by public consumption and investment. Despite fiscal consolidation efforts, investment spending on infrastructure (transport, electricity) is expected to be buoyant. Projects to improve the road network, build a second container terminal at the port of Mombasa, and carry out work at the Malindi, Isiolo, and Lokichogio airports are all on the agenda in 2019. Private investment should be part of this momentum through PPP agreements, reforms to improve the business climate, and a gradual recovery in private sector credit. Exports are expected to be supported by increased agricultural production, particularly of cash crops (tea, horticulture), provided the country is spared weather-wise. Horticultural products could benefit from the start of direct flights to the United States. Conversely, stagnating coffee production and the fact that coffee prices are still relatively low may create some difficulties for the industry. Tourism revenues should also support the trade balance. Most service-related activities – with the notable exception of the banking sector, which will continue to be hurt by the interest rate cap – should get support from domestic consumption. However, consumption could be affected by increased inflationary pressures in 2019. In particular, inflation will be fuelled by higher energy prices, especially following the introduction of an 8% VAT on fuel, as well as by the dissipation of food price disinflation in 2018.


Fiscal consolidation to anchor debt sustainability

The fiscal deficit is expected to shrink in 2018/19 as a result of consolidation efforts. Measures to streamline tax exemptions, the new income tax law (which contains provisions aimed at broadening the tax base), and administrative measures (including electronic tracking of goods) are expected to boost revenues. However, revenues could again suffer from persistent shortcomings in terms of their mobilisation. Efforts to attract private investment and the development of PPPs should help to contain capital investment spending. In addition, the phase-out of exceptional expenditures related to drought relief and organisation of the 2017 elections, which have burdened budgets in the last two fiscal years, should help in the consolidation push. The authorities are undertaking these efforts to curb the growth in debt and rising service costs, which are becoming a matter of concern. Although still mainly of a concessional nature, external debt, which accounts for around 50% of the total, has seen its commercial portion increase, notably through Eurobond issuances on international markets.

The current account deficit is expected to narrow slightly in 2019. The recovery in exports, mainly of agricultural products, is expected to continue and will reduce the goods deficit. At the same time, steps to rationalise capital expenditure should gradually curb demand for imports of capital goods. The surpluses in services and in transfers will benefit, respectively, from increased tourism receipts and remittances from expatriate workers. The income balance will continue to make a minor contribution to the current account balance. FDI and other investments should make it possible to finance a large portion of the current account deficit. In addition, foreign exchange reserves, which were sufficient to cover more than five months of imports at the end of 2018, would cushion the impact of an external shock and limit the volatility of the Kenyan shilling.


Relative political calm restored after the post-electoral crisis

President Uhuru Kenyatta was re-elected in 2017 for a second term after a turbulent political period, during which the Supreme Court rejected the results of the first elections due to irregularities and called for fresh elections, which were then boycotted by the main opposition candidate Raila Odinga. However, in March 2018, a few months after the post-election turmoil, Mr Odinga – who had initially rejected Mr Kenyatta's victory and proclaimed himself “people’s president” – reached a reconciliation agreement with the President, which helped to ease the political tensions.

Despite the truce, the country's deep-seated political, social, and ethnic divisions remain unresolved and could be a source of instability once more in the future. In addition, given the country's military involvement in Somalia, Kenya remains a target for Islamist terrorism, particularly by the al-Shabab group. Meanwhile, recurrent trade disputes with Tanzania could affect the stability of the East African Community, in which Kenya plays a pivotal role.

The 19-place jump in the 2019 Doing Business ranking, putting Kenya 61st in the world (out of 190 countries) and third in sub-Saharan Africa, rewards the many reforms undertaken by the country to improve the business climate. These include measures to make it easier for debtors to continue doing business during insolvency proceedings, as well as steps to simplify tax payment procedures for companies.


Last update : February 2019