In 2024, the global economy experienced modest growth amid inflationary pressures, geopolitical challenges, and climate disruptions. The U.S. economy grew by 2.5%, driven by strong consumer spending, while the Eurozone stagnated at 1.0% due to high energy costs and tight monetary policies. Emerging markets recorded 4.0% growth but struggled with high debt burdens and borrowing costs. Kenya’s economy expanded by 4.0% in Q3 2024, slower than the 5.9% in Q3 2023, with agriculture as the key driver.

2025 Outlook:

• Global growth is projected at 2.7%, depending on geopolitical stability and policy coordination.
• Kenya’s GDP is expected to grow by 5.4%, contingent on fiscal reforms and political stability.
• The Kenyan shilling will likely experience moderate depreciation, supported by remittances and forex reserves.
• Inflation is expected to remain within CBK’s target range (2.5%-7.5%) due to lower fuel and electricity costs.
• Interest rates may decline gradually with reduced domestic borrowing, but government financing needs could slow this trend.
• Treasury bonds are expected to perform well with declining rates and reduced government borrowing.
• The equities market is projected to rise, supported by strong corporate earnings and increased investor confidence.
• Offshore markets could benefit from U.S. economic policies, though KES stability and rising imports will influence performance.