Nairobi: Kenya's economy is projected to expand by 4.3 percent in 2026, down from an earlier forecast of 4.9 percent, as heightened geopolitical tensions and global economic uncertainty weigh on growth prospects, the World Bank has said.
In its latest Kenya Economic Update released on Thursday, the World Bank revised the country's growth forecast downward by 0.6 percentage points from its November 2025 projection, citing the impact of the ongoing conflict in the Middle East and rising global uncertainty.
"In the short term, higher global energy prices and increased uncertainty are expected to raise production costs, weaken private investment growth, and weigh on household purchasing power through higher commodity prices and moderating remittance inflows," the World Bank said in the report.
Published twice a year, the Kenya Economic Update assesses the country's recent economic and social developments, evaluates emerging risks and opportunities, and provides an outlook for medium-term economic performance in the regional and global context.
The World Bank said that, as a net oil importer, Kenya faces rising energy costs, with broad pass-through effects on transport, production and food prices, disproportionately affecting vulnerable households.
The lender noted that elevated costs, heightened global uncertainty and trade disruptions are affecting economic activity, slowing growth and weakening investment, particularly in the private sector.
On the external front, the World Bank said that a higher import bill and disruptions to key trade routes could widen the country's current account deficit.
