Kenya’s Economy grows by 5.3% in first Quarter of 2026

Economic Growth prospects for Kenya is still clouded by effects of the ongoing Middle East Crisis.

Kenya’s economy grew by 5.3% in the first quarter of 2026,  an improved performance compared to the corresponding quarter of 2026.

Real GDP grew by 5.3 per cent in the first quarter of 2026 compared to a growth of 4.9 per cent in the corresponding quarter of 2025.

All the sectors of Kenya’s economy recorded positive growths in the quarter under review, though at varying rates. Notably, manufacturing sector’s growth accelerated to 4.4 per cent in the first quarter of 2026 compared to 2.8 per cent growth in the same quarter of 2025.

Other sectors that recorded notable growths include Accommodation and Food Service (14.7%), Mining and Quarrying (9.1%), Construction (6.6%), Financial & insurance (6.3%), and Information & Communication (5.0%). Agriculture, Forestry and Fishing sector expanded by 4.9 per cent.

Based on the Quarterly Gross Domestic Product Report from the Kenya National Bureau of Statistics (KNBS), Kenya’s economy demonstrated a robust and accelerated growth trajectory in the first quarter of 2026. The economy expanded by 5.3% in 1Q26, a notable acceleration from the 4.9% growth recorded in the corresponding quarter of 2025.

A defining characteristic of this quarter was that many sectors of the economy recorded positive growth. Several key segments showcased a strong turnaround or accelerated momentum compared to the previous year.

Risks to Kenya’s economic growth in 2026

According to a weekly note by Standard Investment Bank(SIB), performance of East Africa’s largest economy is likely to be overshadowed by the ongoing conflict in the Middle East which started on 28th February 2026.

The World Bank projects Kenya’s growth at 4.3% in 2026, before gradually strengthening toward 4.4 percent over the medium term.

This represents a downward revision of about 0.6 percentage points relative to pre-conflict projections published in late 2025, reflecting the impact of the Middle East Conflict on Kenya’s macroeconomic outlook.

In the short term, higher global energy prices and increased uncertainty are expected to raise production costs, weaken private investment growth, and weigh on household purchasing power through higher commodity prices and moderating remittance inflows.