Kenya’s economy expanded by 4.9 per cent in first quarter of 2025, says Treasury PS Kiptoo
The PS highlighted the vital role of insurance and reinsurance in promoting financial stability and pledged government support for inclusive and innovative solutions.
Kenya’s economy has maintained a steady pace, expanding by 4.9 per cent in the first quarter of 2025, Treasury Principal Secretary Chris Kiptoo reported on Friday, September 19.
Kiptoo noted that the financial and insurance sector led growth in 2024 with a 7.6 per cent increase, but stressed that overall insurance coverage remains limited at just 2.3 per cent of GDP.
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“Kenya’s economy remains resilient, recording 4.9 per cent growth in Q1 2025, with the financial and insurance sector expanding by 7.6 per cent in 2024.
Yet, with insurance penetration at just 2.3 per cent of GDP, the challenge and opportunity are clear: we must extend coverage to underserved communities and key sectors such as agriculture and SMEs to drive inclusive growth,” Kiptoo said.
The PS highlighted the vital role of insurance and reinsurance in promoting financial stability and pledged government support for inclusive and innovative solutions.
He called for affordable, practical measures, including digital insurance tools, index-based agricultural coverage, and SME-focused policies, aimed at protecting livelihoods, reducing poverty, and fostering sustainable development.
This statement comes as the World Bank recently adjusted its economic forecast for Kenya, lowering growth to 4.5 per cent in 2025 due to fiscal challenges, tight global financing, and slow private sector investment.
The bank noted that growth in 2024 slowed to 4.5 per cent from 5.6 per cent in 2023, citing rising debt, high interest rates, and limited private credit as key constraints.
According to the World Bank’s Kenya Economic Update, growth is expected to recover gradually in the medium term, averaging around 4.9 per cent between 2025 and 2027, supported by investments in infrastructure, agriculture, and services.
However, the report warned that public debt exceeding 65 per cent of GDP, constrained fiscal space, stagnating private credit, and external shocks such as inflation, adverse weather, and global trade disruptions could threaten this outlook.
The World Bank urged the government to adopt policies that consolidate fiscal management, expand social safety nets, and encourage private sector investment, emphasising the challenge of balancing economic stimulation with rising debt obligations.
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