The Mastercard Economics Institute’s “Economic Outlook 2025” report projects Kenya’s GDP growth at 4.7%, with consumer spending increasing by 4% and inflation stabilizing at 4.8%. Key drivers include rising remittances and high female participation in the workforce, alongside the digitization of payment systems. The report emphasizes the resilience of Kenya’s economy and its potential for inclusive growth.
The Mastercard Economics Institute has unveiled its annual report, “Economic Outlook 2025,” which forecasts Kenya’s economy amidst global changes. The report highlights that Kenya’s GDP is expected to grow by 4.7% year over year, surpassing the anticipated global average of 3.2%. Consumer spending is projected to increase by 4%, with inflation stabilizing at 4.8%, offering relief to households and businesses alike.
Kenya’s economic growth is bolstered by a strong remittance ecosystem and high female labor force participation. This growth reflects the country’s resilience amid global economic shifts, demonstrating the potential for inclusive and sustainable development. Khatija Haque, Chief Economist for EEMEA at Mastercard, remarked, “Kenya’s economic outlook for 2025 highlights its potential for robust growth, underpinned by high remittance inflows, active female workforce participation, and digital transformation.”
The report emphasizes the importance of pricing strategies in the context of recovery from recent economic challenges. While inflation has slowed, price levels remain high, with stabilization anticipated in 2025. This environment encourages sustained consumer spending, especially in essential sectors. In Kenya, real consumer spending growth is projected at 4%, reflecting similar trends globally.
Migration continues to play a vital role in shaping Kenya’s economy, significantly contributing to remittances. In 2023, remittances constituted 3.9% of GDP, highlighting their importance for household income and economic resilience. The digitization of the payments sector facilitates secure and efficient remittance transactions, enhancing accessibility for underserved communities, especially via platforms like M-Pesa.
Additionally, Kenya exhibits a notable trend regarding the participation of women in the workforce. The female labor force participation rate reached 72.5% in 2022, bolstered by job creation in sectors that predominantly employ women, as well as the rise of flexible work arrangements. This surge not only accommodates caregiver responsibilities but also drives growth in consumer spending among households.
The insights in the ‘Economic Outlook 2025’ report stem from a diverse range of data sources, including Mastercard’s sales activity and various economic models to estimate future activity. The report serves as a crucial tool for stakeholders navigating the changing economic landscape in Kenya and beyond.
In summary, the Mastercard Economic Outlook 2025 provides a comprehensive analysis of Kenya’s economic trajectory, forecasting significant growth in GDP and consumer expenditure alongside stabilizing inflation rates. The contributions from remittances and female workforce participation are pivotal to this growth, reflecting resilience and adaptability within the nation. Digital innovation further enhances these prospects, positioning Kenya favorably amidst economic challenges.
Original Source: www.africa.com
