Kenya’s economy grows 5.3%, its fastest first quarter since 2023
Every sector grew, led by hotels and restaurants, as lower interest rates helped credit flow again.
Key points
- Kenya’s economy grew 5.3% in the first quarter of 2026, up from 4.9% a year earlier, according to the Kenya National Bureau of Statistics.
- Every sector grew; accommodation and food services expanded 14.7%, finance and insurance 6.3% and manufacturing 4.4%.
- The Central Bank of Kenya cut its rate ten times to 8.75% by February 2026 and has held it there since, citing uncertainty from the war in the Middle East.
Kenya's economy is picking up speed. Real GDP grew 5.3% in the first quarter of 2026, up from 4.9% in the same quarter of 2025, the Kenya National Bureau of Statistics (KNBS) reported. Business Daily says it was the fastest first-quarter growth since 2023.
Where the growth came from
Every sector of the economy grew during the quarter. Among the standouts:
- Accommodation and food services (hotels and restaurants): up 14.7%, from 8.0% a year earlier, the fastest-growing major sector, helped by record tourism.
- Finance and insurance: up 6.3%, from 5.3%.
- Manufacturing: up 4.4%, from 2.8%.
Construction and agriculture also contributed to growth.
Cheaper credit
Lower interest rates have helped. The Central Bank of Kenya cut its benchmark rate ten times in a row, from August 2024 to February 2026, bringing it down to 8.75%. It has held the rate there at its April, June and August meetings, citing uncertainty linked to the war in the Middle East.
Why it matters
Faster growth is good news after years of high living costs, currency swings and difficult weather. The challenge is making sure it turns into more jobs and higher incomes, the goal behind proposals such as income tax relief for low earners. KNBS is due to publish second-quarter figures next.
Sources
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