Kenya’s economy grew by 4.9 per cent in the third quarter of 2025, up from 4.2 per cent in the same period last year, driven by a rebound in construction and mining activities alongside steady growth in agriculture.


According to the Kenya National Bureau of Statistics (KNBS), the growth was supported by recoveries in sectors that had contracted a year earlier, as well as notable gains in accommodation and food services, real estate, and transport.


In its Quarterly Gross Domestic Product Report for Q3 2025, KNBS noted that overall economic performance improved compared to Q3 2024, when growth stood at 4.2 per cent.


Agriculture, forestry, and fishing expanded by 3.2 per cent, while construction rebounded strongly to 6.7 per cent from a contraction of 2.6 per cent a year earlier. Mining and quarrying also recovered sharply, growing by 16.6 per cent after a 12.2 per cent decline in the same quarter of 2024.


Other sectors posting significant growth included accommodation and food services at 17.7 per cent, real estate at 5.7 per cent, financial and insurance activities at 5.4 per cent, transport and storage at 5.2 per cent, public administration at 5.1 per cent, wholesale and retail trade at 4.8 per cent, and information and communication at 4.5 per cent.


KNBS reported that inflation averaged 4.42 per cent in the quarter, up from 4.08 per cent in Q3 2024, largely due to higher prices for food and non-alcoholic beverages.


During the same period, the Kenyan Shilling appreciated by 0.2 per cent against the US Dollar but weakened against other major currencies, depreciating by 6.2 per cent against the Euro, 3.6 per cent against the Pound Sterling, 1.6 per cent against the South African Rand, and 0.7 per cent against the Japanese Yen. Regionally, the Shilling strengthened against the Tanzanian and Ugandan shillings by 5.8 per cent and 4.1 per cent, respectively.


The Central Bank Rate was lowered from 9.75 per cent in July 2025 to 9.50 per cent in August and September, compared with 12.75 per cent in September 2024.


In a statement on Tuesday, Treasury and Economic Planning Principal Secretary Chris Kiptoo said improving per capita income is central to Kenya’s development goals.


“In 2025, Kenya’s economy remained on a stable and improving path. Lower inflation eased pressure on households through reduced commodity prices compared to 2023, even as we continue working to further lower the cost of living and strengthen incomes,” Kiptoo said.


“We think that more could be done to improve the income levels of Kenyans. And that’s the aspiration. When you hear we want to up our ambition to be a first-world country, what are we saying? We’re talking about per capita income.”


He noted that Kenya’s per capita income stood at about $2,000, based on a GDP of $140 billion, compared with more than $50,000 in countries such as Singapore.


“So to reach there means there’s a lot that we have to do,” he said.


Kiptoo added that export performance strengthened in 2025.


“The economy has done well, and you can see exports of goods have performed well. You will see we have had foreign exchange inflows from coffee, tea and other commodities that we sell,” he said.


“Our export receipts from services have also done well, particularly from tourism and other services. You can see that there has been a growth in revenue in foreign exchange,” he added, noting that remittances from Kenyans abroad increased by six per cent over the past year.


The KNBS report also highlighted gains in financial markets and liquidity. The NSE 20 Share Index rose sharply from 1,776 points in September 2024 to 2,973 points in September 2025. Broad money supply (M3) increased from Sh 5,992.2 billion to Sh 6,443.7 billion, while the current account deficit widened from Sh 43.5 billion to Sh 135.3 billion.


In agriculture, growth was supported by increased milk production and strong cut flower exports. Milk deliveries to processors rose by 9.7 per cent to 249.0 million litres, while cut flower exports increased by 36.2 per cent to 31,277 metric tonnes. However, exports of coffee, vegetables, and fruits declined, alongside reduced sugarcane deliveries and tea production.


Manufacturing expanded by 2.5 per cent, slightly above the 2.3 per cent growth recorded a year earlier. Non-food manufacturing drove growth, supported by higher cement production, which rose by 15.7 per cent to 2,704.5 thousand metric tonnes, a 20.3 per cent increase in galvanized sheets output, and higher motor vehicle assembly. Sugar production fell sharply by 49.4 per cent, and soft drinks output declined by 2.2 per cent. Credit to manufacturing enterprises increased from Sh 532.0 billion to Sh 591.2 billion.


Electricity and water supply grew by 3.6 per cent, up from 0.9 per cent in Q3 2024, driven by a 5.0 per cent rise in electricity generation. Geothermal and solar generation increased, while hydroelectric output declined.


Construction activity strengthened, with cement consumption rising by 16.2 per cent, iron and steel imports reaching 336,262 metric tonnes, and credit to the sector increasing from Sh 129.2 billion to Sh 195.3 billion.


Transport and storage grew by 5.2 per cent, supported by increased activity at the Port of Mombasa, higher diesel consumption, and growth in air travel. Passenger numbers on the Standard Gauge Railway increased by 8.6 per cent, although freight volumes declined slightly.


Accommodation and food service activities expanded by 17.7 per cent, boosted by increased visitor arrivals as Kenya co-hosted the African Nations Championship (CHAN). International arrivals through Jomo Kenyatta and Mombasa international airports rose by 9.9 per cent to 578,234 passengers.


KNBS, however, noted a slowdown in information and communication growth to 4.5 per cent from 6.9 per cent a year earlier. Despite increases in voice traffic, SMS usage, and mobile money transactions, growth was constrained by a decline in utilised international bandwidth.


Financial and insurance activities grew by 5.4 per cent, down from 7.3 per cent in Q3 2024, reflecting easing credit conditions. Average lending rates declined, the interbank rate fell to 9.48 per cent, and the 91-day Treasury bill yield dropped to 7.96 per cent.