The Kenyan economy expanded at a slower rate of 4.6 percent in 2025. This was down from 4.7 percent the previous year. Growth in key sectors, including agriculture and manufacturing, moderated during the period.

Fresh data from the Kenya National Bureau of Statistics (KNBS) shows the slowdown was driven by weaker agricultural output. Disrupted rainfall patterns affected crop production across the country. The agriculture sector, which remains the largest segment of the economy, grew at a slower pace of 2.8 percent. This was down from 4.3 percent in 2024.

Wheat and green leaf tea production fell during the year. Sugarcane output also dropped sharply. The manufacturing sector also slowed. It expanded by only 2.1 percent compared with 3.2 percent in 2024.

Kenya Economic Growth Slows to 4.6% in 2025 as Agriculture Takes a Hit from Poor Rains

Construction sector shows strong recovery

The construction sector, however, marked a significant recovery. It expanded by 6.8 percent, up from a contraction of 0.7 percent in 2024. The resumption of government road works largely supported this growth. Infrastructure spending helped create jobs and stimulate related industries.

Mining and quarrying also performed well. The sector expanded sharply by 14.9 percent. This growth was driven by increased activity in the extraction of minerals.

Services sectors remained resilient throughout the year. Accommodation and food services grew by 15.6 percent as tourism continued to recover. Public administration expanded by 8.3 percent. Financial and insurance services grew by 6.5 percent. Information and communication expanded by 4.8 percent.

Transport and storage grew by 3.7 percent. Wholesale and retail trade expanded by 3.6 percent. These sectors helped cushion the economy from the sharper slowdown in agriculture and manufacturing.

Formal employment rises despite slower growth

Formal employment recovered during the year despite the slower growth rate. It rose by 4 percent to 3.5 million jobs. The share of informal employment declined slightly to 83.8 percent from 90 percent previously. Informal employment accounted for 18.1 million jobs. Total employment for the period stood at 21.6 million.

The growth in formal employment is a positive sign. It indicates that businesses are hiring despite the economic slowdown. More Kenyans are getting jobs with regular wages and benefits.

GDP per capita reaches Sh329,594

The Kenyan economy is now valued at Sh17.58 trillion. This is up from Sh16.23 trillion in 2024. GDP per capita stands at Sh329,594. This represents an increase from the previous year.

Domestic demand held steady during 2025. Private consumption grew by 4.7 percent. Government spending rose by 8 percent. These factors helped support economic activity even as production in some sectors declined.

Agriculture remains vulnerable to climate shocks

KNBS noted that agriculture still accounts for 23.2 percent of GDP. This underscores the sector’s outsized influence on overall economic performance. When agriculture suffers, the entire economy feels the impact.

“The slowdown in 2025 was primarily driven by weakened agricultural output following erratic rainfall patterns,” the report said.

The findings highlight Kenya’s continued vulnerability to climate shocks. Even as stronger performance in construction, mining and services helps cushion overall growth, the economy remains exposed to the weather.

Key crops that recorded production declines

Several key crops recorded significant production declines in 2025:

  • Wheat production dropped by 18.2 percent
  • Tea production fell by 7.8 percent
  • Sugarcane production plunged by 24.7 percent
  • Sugar production fell by 24.8 percent to 613,200 metric tonnes

These declines affected farmers, processors, and workers along the value chains. Lower production means less income for farmers. It also means less raw material for factories. This explains why manufacturing growth also slowed.

Manufacturing slowdown linked to food processing

Manufacturing growth slowed to 2.0 percent from 3.0 percent in 2024. The slowdown was largely due to contraction in food-related industries. Sugar mills processed less cane. Tea factories handled fewer leaves. Wheat millers ground less grain.

However, gains were recorded in other manufacturing subsectors. Cement production increased. Textile manufacturing expanded. Pharmaceutical production grew. Motor vehicle assembly also recorded gains. These diversifications helped limit the overall manufacturing slowdown.

Construction rebound driven by government projects

The construction sector’s rebound from a contraction of 0.7 percent to growth of 6.8 percent is notable. Government road works were the main driver. The administration has prioritized infrastructure as a way to create jobs and stimulate economic activity.

Road construction creates demand for materials like cement, steel, and gravel. It also creates jobs for engineers, surveyors, and labourers. The knock-on effects spread throughout the economy.

Services sectors show resilience

The services sectors proved resilient in 2025. Accommodation and food services grew by 15.6 percent. This reflects the continued recovery of tourism. International visitor numbers have been rising. Domestic tourism has also picked up.

Financial and insurance services grew by 6.5 percent. Banks and insurers benefited from increased economic activity. Information and communication expanded by 4.8 percent. The digital economy continues to grow as more services move online.

Looking ahead to 2026

The Kenya economic growth 2025 data provides a baseline for 2026 projections. The agriculture sector will need favourable weather to recover. The government is investing in irrigation to reduce dependence on rain-fed farming. These projects may take time to bear fruit.

The manufacturing sector will benefit from lower production costs if energy prices remain stable. The government’s focus on local production may also support factory output.

The construction sector is expected to maintain its momentum. Road projects are continuing. Housing construction is also picking up in urban areas.

The Kenya economic growth 2025 figures show an economy that is slowing but not stalled. The 4.6 percent growth rate is still healthy by global standards. However, the vulnerability to climate shocks remains a concern. The government’s push for irrigation and climate-smart agriculture is a response to this challenge.

The findings highlight Kenya’s continued need to diversify away from rain-fed agriculture. The private sector has a role to play in building resilience. Investors can fund irrigation projects. They can support food processing. They can help create jobs outside agriculture.

The Kenya economic growth 2025 report is a wake-up call. The country cannot rely on weather-dependent farming alone. It must build systems that protect farmers from drought. It must create industries that are not dependent on rainfall. The construction and services sectors have shown the way. Agriculture must follow.

https://farmerstrend.co.ke/wp-content/uploads/2026/04/ChatGPT-Image-Apr-30-2026-02_37_58-AM-683x1024.pnghttps://farmerstrend.co.ke/wp-content/uploads/2026/04/ChatGPT-Image-Apr-30-2026-02_37_58-AM-150x150.pngFarmersTrendFarming NewsThe Kenyan economy expanded at a slower rate of 4.6 percent in 2025. This was down from 4.7 percent the previous year. Growth in key sectors, including agriculture and manufacturing, moderated during the period. Fresh data from the Kenya National Bureau of Statistics (KNBS) shows the slowdown was driven by...New Generation Culture in Agriculture