By Murungi Ndai
Kenya’s economy expanded by 4.9 per cent in the third quarter of 2025, according to data released by the Kenya National Bureau of Statistics (KNBS), a modest acceleration from 4.2 per cent in the same period a year earlier. During the same period, the GDP had recorded a 9.4%, 4.6% and 5.9% for 2021, 2022 and 2023 reporting periods.
While this headline growth figure may signal resilience in the face of global economic pressures, the reality on the ground for most Kenyans tells a very different story: economic pain persists, and many households cannot relate to the reported growth.
Gross Domestic Product (GDP) measures total output of goods and services in an economy. An increase in GDP implies that overall economic activity is higher than before. In Kenya’s case, expansion was mainly driven by sectors like construction, mining and quarrying, agriculture, forestry and fishing, accommodation services and some financial activities.
However, GDP is an average of economic activity, and it aggregates output across large firms, public investment, and formal sectors. It does not capture how that output is distributed or whether ordinary citizens are better off as a result.
Many of the growing sectors particularly construction and mining are capital intensive. They rely on machinery and investment rather than large numbers of workers. Even where employment grows, wage gains have been minimal compared with the cost of living, diluting the actual impact of growth on household incomes.
The Stanbic Bank Kenya PMI for November stood at 55, the highest ever, while December PMI stood at 53.7, showing ongoing expansion, business activity and demand, wage growth remained weak, even as employment rose.
Headline inflation has eased compared to earlier peaks, but prices for essentials particularly food, transport, and energy remain elevated for many households. The KNBS figure for inflation in late 2025 was around 4.4–4.5 per cent, but stable inflation at that level still means prices are high relative to past years.
Kenya public debt oscillates at KSh. 12 trillion which is in thr range of 67% of our GDP. 70% of Kenya’s revenues is used to pay debt leaving the 30% for other expenses like salaries, operations, development and services which is not sufficient. This have constrained government spending on social services and safety nets. Even though macroeconomic indicators reflect stability, allocations for health, education, and direct support programmes have had to compete with debt obligations and recurrent costs.
The high government domestic borrowing, currently at over KSh. 6.6 trillion, has absorbed a large share of available credit in the economy, causing credit crowding out, leaving less credit and more expensive credit for businesses and households. Credit therefore remains expensive and access limited for many small enterprises, particularly in agriculture and low-income urban areas. Without broader access to affordable financing, small businesses which is the backbone of Kenyan livelihoods, struggle to expand or raise productivity.
While Kenya’s 4.9 per cent GDP growth is a positive sign that the economy is not in recession and retains productive momentum, the average figure masks a crucial reality – the majority of Kenyans are not yet feeling tangible relief in their everyday lives.
