Kenya’s economy recorded stronger growth in the first quarter of 2026, expanding by 5.3 per cent compared to 4.9 per cent during the same period in 2025, according to the latest Quarterly Gross Domestic Product (GDP) report released by the Kenya National Bureau of Statistics (KNBS).
The improved performance reflects broad-based expansion across all sectors of the economy, with manufacturing, hospitality, mining, construction and financial services among the strongest contributors.
According to KNBS, every major economic sector posted positive growth during the January-to-March period, although at varying rates, signalling continued resilience despite global economic uncertainty.
Manufacturing, hospitality lead growth
The manufacturing sector recorded one of the biggest improvements, growing by 4.4 per cent, up from 2.8 per cent in the corresponding quarter of 2025.
The accommodation and food services sector remained the fastest-growing segment of the economy, expanding by 14.7 per cent as tourism and hospitality activities continued to recover.
Other sectors posting notable growth included mining and quarrying (9.1 per cent), construction (6.6 per cent), financial and insurance activities (6.3 per cent), and information and communication (5.0 per cent).
Meanwhile, the agriculture, forestry and fishing sector, a key pillar of Kenya’s economy, expanded by 4.9 per cent during the quarter.
The broad-based growth underscores the economy’s ability to sustain momentum across multiple industries despite persistent global challenges.
Economy remains resilient
The latest GDP figures indicate that Kenya maintained a steady growth trajectory at the beginning of 2026, supported by increased activity across productive sectors.
The positive performance comes as businesses continue to adapt to changing market conditions while government investments in infrastructure, manufacturing and services support economic expansion.
Middle East conflict poses risks
Despite the encouraging growth figures, analysts caution that Kenya’s economic outlook remains vulnerable to external shocks.
According to Standard Investment Bank (SIB), the ongoing conflict in the Middle East is expected to weigh on Kenya’s economy through higher fuel prices, rising production costs and increased global uncertainty.
The bank noted that elevated energy prices could reduce household purchasing power, slow private sector investment and increase the cost of doing business.
At the same time, softer remittance inflows and higher commodity prices may place additional pressure on consumers and businesses.
World Bank lowers growth outlook
The World Bank projects Kenya’s economy will grow by 4.3 per cent in 2026 before improving gradually to 4.4 per cent over the medium term.
The forecast represents a downward revision from earlier projections made before the escalation of the Middle East conflict, reflecting concerns over its impact on the global economy and Kenya’s macroeconomic outlook.
Even so, Kenya remains among the stronger-performing economies in the region, with continued expansion expected to be supported by domestic demand, infrastructure development and growth across key sectors of the economy.
