Kenya’s economy slowed down in the second half of 2024, with GDP growth dropping to 4.7% from 5.6% in 2023, as per a Knight Frank report released on Monday.
The report links this slowdown to high public debt and low private investment, which hindered overall economic growth.
Despite these challenges, inflation stayed within the Central Bank of Kenya’s (CBK) target range of 2.5% – 7.5%, providing some stability.
The Kenya Shilling strengthened significantly, appreciating by 20.86% against the US dollar, ending the year at KES 129 per USD.
While interest rates were high throughout the year, the CBK lowered its base rate from 13% to 11.25%, offering some relief to borrowers.
However, the Nairobi Securities Exchange (NSE) remained quiet, with government securities attracting the most investor interest.
Also Read: Kenya’s Economy Grows by 4% in Q3 2024, the Slowest Pace Since Early 2021
“Kenya’s resilience is strong despite economic challenges. With stable inflation and currency, we see continued investor confidence and strategic investment opportunities,” said Mark Dunford, CEO of Knight Frank Kenya.
The industrial sector remained a highlight, with Special Economic Zones (SEZs) attracting new investments. Nairobi Gate Industrial Park launched its $7 million fifth phase, and manufacturing giant Kim-Fay secured Ksh.2.5 billion for new facilities.
However, high production costs and power supply issues persisted. The government plans to build Kenya’s first nuclear power plant by 2027, costing Ksh.500 billion, aiming to boost energy stability and industrial growth.
The prime residential market saw increased demand, with sale prices rising 8.27% year-on-year, up from 2.45% in 2023. Prime rental prices also grew 6.56% in H2 2024.
Zoning changes in areas like Kilimani continued to transform Nairobi’s skyline, and the “build-to-sell” model gained popularity, particularly in Westlands, Runda, and Kiambu Road.
Despite economic uncertainties, experts remain optimistic about long-term growth, expecting strategic investments and policy reforms to shape Kenya’s economic future.
