Mastercard’s ‘Economic Outlook 2025’ indicates Kenya’s GDP will grow by 4.7%, with consumer spending increasing by 4% and inflation stabilizing at 4.8%. Key drivers include significant remittance inflows and high female labor force participation. The report emphasizes ongoing digital transformation as essential for economic resilience and growth.
The Mastercard Economics Institute has outlined its forecast for Kenya in its annual report, ‘Economic Outlook 2025.’ This assessment anticipates a year of significant economic growth, with GDP projected to increase by 4.7% year over year, surpassing the global average of 3.2%. Consumer spending is also expected to rise by 4%, while inflation may stabilize at 4.8%, providing relief to households and businesses alike.
This optimistic economic forecast is bolstered by the steady rise in remittances and the high participation of women in the workforce. These factors contribute to increased household incomes and demonstrate resilience in the Kenyan economy amidst global changes. The report emphasizes the importance of digital innovation and regional trade as key elements supporting economic growth.
Khatija Haque, Chief Economist for EEMEA at Mastercard, remarked on Kenya’s potential: “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.”
Shehryar Ali, Senior Vice President and Country Manager for East Africa and Indian Ocean Islands at Mastercard, highlighted the ongoing digital transformation within Kenya. He stated, “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…”
The report addresses consumer pricing trends, noting that inflation has stabilized after a tumultuous period marked by the pandemic and geopolitical issues. In Kenya, the projected stabilization of inflation creates opportunities for consumer spending in critical sectors like food, healthcare, and education while influencing consumer behavior toward more affordable options.
Migration has played a crucial role in shaping Kenya’s economic landscape, as it not only leads to a loss of human capital but also generates substantial remittances that support low- and middle-income communities. The World Bank notes a significant rise in remittances, with Kenya’s financial ecosystem benefiting from advanced mobile money platforms like M-Pesa, which enhances transaction efficiency.
The rise of the SHEconomy in Kenya is noteworthy, as women’s workforce participation has grown significantly, reaching 72.5% in 2022. This increase aligns with global trends and reflects job creation in sectors predominantly employing women, as well as the flexibility offered by remote work arrangements. Such dynamics are expected to continue influencing economic growth into 2025, providing a boost to household incomes and consumption.
The insights presented in the ‘Economic Outlook 2025’ report are based on a comprehensive analysis of public and proprietary data sets, including Mastercard’s aggregated sales activity.
In summary, the Mastercard Economics Institute’s ‘Economic Outlook 2025’ underscores a positive economic trajectory for Kenya characterized by robust GDP growth, rising consumer spending, and stable inflation. With substantial contributions from remittances and high female participation in the labor force, Kenya is well-positioned to achieve inclusive and sustainable development. Furthermore, the ongoing digital transformation will play a significant role in enhancing economic opportunities and resilience for the nation’s diverse communities.
Original Source: www.africa.com
