The Mastercard Economics Institute’s ‘Economic Outlook 2025’ projects a GDP growth of 4.7% for Kenya, alongside a 4% rise in consumer spending and an inflation stabilization at 4.8%. Factors contributing to this growth include increased remittances, high female workforce participation, and digital transformation enhancing economic resilience.
The ‘Economic Outlook 2025’ report from the Mastercard Economics Institute outlines key trends expected to shape Kenya’s economy. It forecasts a GDP growth of 4.7% year-over-year, with consumer spending projected to rise by 4%. Additionally, consumer price inflation is anticipated to stabilize at 4.8%. Such outcomes provide necessary relief to households and businesses alike, reinforcing resilience in the Kenyan economy.
Anticipated growth in Kenya is attributed to robust remittance inflows and the high participation of women in the labor force, alongside fostering household incomes. The economy exploits digital advancements and regional trade integration, positioning itself strongly amid global challenges. Moreover, migration has positively influenced remittance inflows, which accounted for 3.9% of the GDP in 2023, enhancing economic resilience.
Khatija Haque, Chief Economist for EEMEA at Mastercard, emphasized that Kenya’s outlook showcases its potential for significant growth driven by its active female workforce and digital transformation. She stated, “These trends position the country as a leader in fostering inclusive and sustainable development.” Similarly, Shehryar Ali, Senior Vice President at Mastercard, acknowledged the rapid digital evolution in Kenya and the commitment of Mastercard to drive transformation in payment acceptance.
A notable trend highlighted by the report is the adjustment in consumer behavior due to price pressures, leading households to opt for more affordable products. The moderation in inflation supports sustained consumer spending, particularly in vital sectors such as food and healthcare, reflecting global purchasing trends.
The report also emphasizes the increasing significance of remittances, driven by ongoing migration trends. The financial support from remittances, enhanced by Kenya’s advanced mobile money infrastructure, is crucial for low- and middle-income communities. This enhancement allows for secure cross-border transactions and greater accessibility to financial resources, further contributing to economic stability.
Additionally, the rise of women in the workforce, described as the ‘SHEconomy,’ aligns with global patterns. This increase in participation is attributed to job creation in female-dominated sectors and flexible work policies, with women’s labor force participation in Kenya reaching an impressive 72.5% in 2022. This trend is expected to bolster household incomes and stimulate consumption growth in the coming years.
In summary, the Mastercard Economics Institute’s ‘Economic Outlook 2025’ highlights a promising economic trajectory for Kenya, characterized by a projected GDP growth of 4.7%, increased consumer spending, and stabilized inflation. Furthermore, the impact of remittances and the high participation of women in the workforce plays a critical role in sustaining economic resilience. As the country leverages digital innovation and flexible work policies, its position in inclusive and sustainable development is likely to strengthen.
Original Source: www.africa.com
