Kenya’s GDP Projected to Grow by 4.7%, Driven by Digitization – Mastercard
Kenya’s GDP in 2025 is projected to grow by 4.7% year over year, outpacing the global average which is forecast at 3.2.% – a modest increase on 3.1% in 2024. This is according to the Mastercard Economics Institute’s 2025 Economic Outlook for Kenya released last week.
According to the report, consumer spending in the country is predicted to rise by 4%, while consumer price inflation is likely to stabilize at 4.8%, offering much-needed relief to households and businesses.
The report notes that economic growth is supported by a robust remittance ecosystem and high female labor force participation, which continues to drive household incomes. It further adds that Kenya’s economy demonstrates resilience amid global shifts, leveraging digital innovation and regional trade integration to sustain progress.
“Kenya’s economic outlook for 2025 highlights its potential for robust growth, underpinned by high remittance inflows, active female workforce participation, and digital transformation. These trends position the country as a leader in fostering inclusive and sustainable development,” Khatija Haque, chief economist, EEMEA, Mastercard said.
According to the report, consumers worldwide have been navigating a bumpy road of rising prices over the last five years, largely driven by the pandemic and geopolitical tensions. While inflation has slowed significantly, price levels themselves remain elevated. In Kenya, inflation is forecast to stabilize at 4.8% in 2025, reflecting global trends.
This moderation creates opportunities for sustained consumer spending, particularly in essential sectors such as food, healthcare, and education. However, lingering price pressures continue to influence consumer behavior, with households opting for more affordable versions of discretionary items. This trend of ‘trading down’ is reflected in Kenya’s real consumer spending growth, projected at 4% in 2025, aligning with global purchasing behaviors.
Mascard also says that the last few years have seen significant movement in people and, by extension, capital. Migration, while resulting in a loss of human capital, also generates substantial remittances, which serve as a lifeline for low- and middle-income communities in developing economies. According to the World Bank, global remittances surged from $128 billion in 2000 to $857 billion in 2023, with an estimated growth of 3% in 2024 and 2025. Economic recovery and local reforms are expected to sustain remittance growth through 2025, while the continued digitization of the payments industry allows recipients to shift to digital and mobile channels, resulting in considerable cost efficiencies, security and convenience.
In Kenya, migration continues to shape the country’s economic landscape, significantly contributing to remittance inflows. In 2023, remittances accounted for 3.9% of GDP, up from a pre-pandemic average of 2.3%, underscoring their critical role in supporting household incomes and economic resilience.
Kenya’s advanced mobile money infrastructure, led by platforms like M-Pesa has further enhanced the efficiency and accessibility of remittances. These platforms facilitate secure and convenient cross-border transactions, reducing costs and empowering underserved communities.
“Kenya’s digital evolution is accelerating at a fast pace, and Mastercard is committed to driving this transformation. As the ‘Silicon Savannah,’ Kenya leads in innovation, and we’re enhancing acceptance with tokenization, wearables, and contactless payments.” Shehryar Ali, Senior Vice President and Country Manager for East Africa and Indian Ocean Islands at Mastercard, said.
These solutions, along with our first multi-currency prepaid card, streamline payments and empower communities to engage confidently in global commerce.”
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