The Mastercard Economics Institute forecasts Kenya’s GDP to grow by 4.7% in 2025, above the global average of 3.2%. Consumer spending is expected to increase by 4% and inflation to stabilize at 4.8%. Key factors include significant remittance flows and high female workforce participation, which support economic resilience and household incomes.
The Mastercard Economics Institute’s report, ‘Economic Outlook 2025,’ forecasts Kenya’s GDP growth at 4.7%, surpassing the global average of 3.2%. This growth is attributed to increased consumer spending, projected to rise by 4%, and a stabilization of consumer price inflation at 4.8%. The report highlights Kenya’s resilience amid global economic shifts, as it leverages digital innovation and regional trade to sustain its economy.
Key findings indicate that remittances play a critical role in economic support, particularly due to high participation rates among women in the workforce. Women’s employment in sectors with job growth, alongside flexible work policies, bolsters household incomes and consumer spending. “Kenya’s economic outlook highlights its potential for robust growth… position[ing] the country as a leader in fostering inclusive and sustainable development,” noted Khatija Haque, chief economist at Mastercard.
The report also emphasizes the impact of digital payments, stating that digitization enhances the efficiency and security of remittance processes, aligning with the global upward trend in remittance inflows. With remittances representing 3.9% of Kenya’s GDP in 2023, up from a pre-pandemic average of 2.3%, it underscores their vital role for households.
Kenya’s evolving economic landscape is characterized by both a return of workers, particularly women, and the rise of the SHEconomy. Women’s labor force participation significantly exceeds pre-pandemic levels—standing at 72.5% in 2022—driven by job creation in female-dominated sectors and the flexibility offered by remote work, further influencing economic consumption growth.
The comprehensive outlook incorporates extensive public data and Mastercard’s sales activity models to project future economic activities, setting the stage for a continued trajectory of growth and resilience amid challenging global economic conditions.
In conclusion, the Mastercard Economics Institute’s ‘Economic Outlook 2025’ report presents a promising forecast for Kenya, underpinned by strong GDP growth, an increase in consumer spending, and a stable inflation rate. The impact of remittances and active female workforce participation are crucial to sustaining economic resilience. Moving forward, Kenya’s digital innovation will be key in navigating the global economic landscape and fostering inclusive growth.
Original Source: www.africa.com
