The International Monetary Fund’s latest World Economic Outlook projects Kenya’s gross domestic product to grow by 4.7 per cent in 2027, up from 4.5 per cent in 2026.
The Fund cut its 2027 inflation forecast to 5 per cent from the 5.9 per cent projected in April, while retaining the 2026 estimate at 5.9 per cent.
IMF projections also show the current-account deficit narrowing to 4.1 per cent of GDP in 2027, compared with a projected 5.4 per cent this year.
The Fund expects the average price of a barrel of oil to fall to $87.39 in 2027 from $95.74 in 2026.
Kenya’s National Treasury expects the budget deficit to rise to 5.9 per cent of GDP in the 2027/28 financial year, up from 5.5 per cent in 2026/27.
Ken Gichinga, chief economist at Mentoria Economics, warned that heavy government borrowing, including settlement of nearly KSh1.6 trillion of debt this year, could crowd out the private sector and that rising interest rates may slow credit flow.
Economist Churchill Ogutu said prolonged geopolitical tensions could trigger another energy-price shock and highlighted additional risks from El Nino and Ebola.
Kenya’s year-on-year inflation stood at 6.8 per cent in September 2026, according to the Kenya National Bureau of Statistics, while the Central Bank of Kenya projects inflation to peak at 7.2 per cent in December 2026 before easing to 5.1 per cent by August 2027.
The IMF outlook contrasts with 2022, when growth fell to 4.9 per cent after a 7.6 per cent surge in 2021 and inflation rose to 7.66 per cent.
The World Bank has upgraded Kenya’s 2026 growth forecast to 4.6 per cent, providing a slightly higher baseline for the IMF’s projections.
