By Editor
Kenya’s economy expanded by 4.6 percent to KSh 16.2 trillion in 2025, underpinned by a rebound in tourism, steady manufacturing growth, and easing inflation, according to the Economic Survey 2026 launched in Nairobi on Wednesday by the Kenya National Bureau of Statistics.
Unveiling the report, KNBS Director General Dr. Macdonald Obudho emphasized the critical role of data in shaping national policy and economic planning.
“Our policies, budgets, and reforms are only as strong as the data that underpins them.” Dr Obudho.
Tourism Sector Rebounds
The tourism sector recorded a notable recovery in 2025, with international arrivals rising by over 5 percent to surpass 2 million visitors. Departing visitors increased by 8.0 percent to about 2.43 million, while outbound Kenyan residents grew by 9.8 percent to 1.54 million.
Holidaymakers accounted for the largest share of arrivals at 47.8 percent, signaling renewed global confidence in Kenya as a travel destination.
Hotel bed-night occupancy rose by 12.6 percent to 11.6 million, with Kenyan residents accounting for 45 percent of occupancy. Visits to national parks and game reserves also increased by 5.7 percent to nearly 4 million, driven largely by international tourists, although domestic visitors remained the majority.
However, the report noted a decline in visits to museums, snake parks, and historical sites, which dropped from 1.15 million in 2024 to 1.11 million in 2025.
Conference tourism showed strong growth, with local conferences increasing by 12.9 percent to 12,700, while international conferences reached 998 during the year.
Manufacturing Shows Modest Growth
The manufacturing sector contributed 7.1 percent to GDP, with output growing by 2.0 percent to KSh 3.8 trillion. Employment in the sector rose by 5.2 percent to 388,564 workers, representing 11.7 percent of total formal employment.
Growth was supported by both domestic and export-oriented industries, although agro-based manufacturing contracted by 1.2 percent. This decline was attributed to a sharp 24.8 percent drop in sugar production and a 5.0 percent fall in fruit and vegetable processing.
In contrast, cement production rose significantly to 10.4 million tonnes, while basic metals output increased by 4.9 percent.
Credit to the manufacturing sector expanded by 5.7 percent to KSh 596.3 billion, despite a decline in lending from development finance institutions. The number of approved projects rose to 17, although proposed investment values dropped to KSh 12.2 billion.
Export Processing Zones (EPZs) continued to play a key role, with gazetted zones increasing to 114. Employment in these zones grew by 16.4 percent to over 104,000 workers, while sales rose by 4.4 percent to KSh 142.2 billion. Exports from EPZs reached KSh 136.8 billion, supported by increased capital investment.
However, apparel exports to the United States under the African Growth and Opportunity Act declined by 4.1 percent to KSh 58.1 billion.
Inflation Eases, Jobs Expand
Inflation eased to 4.1 percent, remaining within the government’s target range, providing relief to households and businesses. The economy generated 822,100 new jobs in 2025, reflecting steady labor market recovery.
Digital growth also accelerated, with internet subscriptions rising to 64.4 million and mobile penetration reaching 146.99 subscriptions per 100 people.
Policy Direction and Outlook
The government reaffirmed its commitment to strengthening macroeconomic stability and advancing inclusive growth under the Bottom-Up Economic Transformation Agenda.
The survey also introduced the Residential Property Price Index (RPPI), aimed at improving monitoring of the real estate sector and enhancing evidence-based policymaking.
