By The Weekly Vision Business Desk
Kenya’s economy gathered fresh momentum in the first quarter of 2026, expanding by 5.3% compared with 4.9% during the same period in 2025, according to the latest figures released by the Kenya National Bureau of Statistics (KNBS).
The stronger performance marks Kenya’s best first-quarter economic growth since 2023 and points to a broad-based recovery, supported by lower borrowing costs, resilient domestic demand and improved performance across key sectors. According to the KNBS, all major sectors of the economy recorded positive growth, although at different rates.
The accommodation and food services sector, buoyed by a continued recovery in tourism, emerged as the fastest-growing industry, expanding by 14.7%, up sharply from 8.0% recorded during the corresponding quarter of 2025. The manufacturing and agriculture sectors also made significant contributions to the overall economic expansion, underlining the increasingly broad-based nature of the recovery.
KNBS said the economy performed better than in the corresponding quarter of 2025, with gains recorded across virtually all productive sectors. The improved outlook was aided by lower commercial lending rates following the Central Bank of Kenya’s (CBK) decision to reduce the Central Bank Rate (CBR) to 8.75% by March 2026. The lower interest rate environment is expected to have encouraged private sector borrowing, investment and business expansion.
Despite the encouraging growth figures, several macroeconomic challenges persist. Inflation edged higher to 4.35% during the quarter, compared with 3.45% a year earlier, largely driven by rising food prices. Meanwhile, Kenya’s current account deficit widened significantly, increasing from KSh70 billion to KSh120.9 billion.
Economists nevertheless view the first-quarter performance as a positive sign, particularly against a backdrop of slowing global growth and continued economic uncertainty across many emerging markets.
They argue that stronger tourism earnings, resilient manufacturing activity and more accommodative financial conditions have helped cushion the economy from external shocks while laying the foundation for sustained growth.
The latest figures come as both the government and the private sector continue to push for structural reforms aimed at boosting productivity, attracting investment and creating jobs.
Further sector-specific data and updated economic projections are expected in upcoming KNBS releases, which will provide a clearer picture of Kenya’s growth prospects for the remainder of 2026.
