Kenya’s economy is projected to stagnate this year, with a gross domestic product (GDP) growth forecast at 4.9 per cent, the same pace as last year.


According to the World Bank’s latest economic prospects report, the growth is, however, expected to edge up slightly to 5.0 per cent next year.


The stagnation reflects a mix of domestic and external pressures weighing on Sub-Saharan Africa’s largest economies, with risks to the regional outlook still tilted to the downside.


The lender warns that growth could undershoot projections if global trade barriers rise, reform momentum slows, global growth weakens, or weather-related shocks intensify.


Compared with its immediate neighbours, Kenya stands out as the only economy in the region with a subdued growth outlook.


Tanzania’s economy is projected to expand by 6.2 per cent this year, up from 6.0 per cent last year.


Uganda is also expected to post faster growth of 6.4 per cent, slightly higher than the 6.3 per cent recorded previously.


Rwanda is forecast to remain the region’s fastest-growing economy, with GDP expansion projected at 7.2 per cent, compared with 7.0 per cent last year.


The stronger performance among Kenya’s neighbours underscores the relative drag on one of Africa’s largest economies in the region, as inflationary pressures, climate-related shocks and exposure to global trade risks continue to weigh on growth.


Kenya is among a handful of African countries identified as particularly exposed to shifts in global trade, due to its reliance on the United States market for goods and commodity exports.


The lender notes that adverse changes in trade policy could further slow global growth, dampen demand, and trigger additional declines in commodity prices, factors that would directly affect Kenya’s export earnings.


At the domestic level, persistent food inflation continues to constrain household spending and overall economic activity.


In the previous assessment, the World Bank attributed its downgrade of Kenya’s growth outlook to rising food prices linked to prolonged drought conditions in Eastern Africa.


“Food price inflation remains a challenge in many Sub-Saharan African economies,” the lender noted.


It had downgraded Kenya’s GDP growth forecast for 2025 to 4.5 per cent, down from 4.7 per cent recorded the previous year.