Kenya’s economy recorded stronger growth in the first half of 2026, with the World Bank reporting an improvement in economic performance under President William Ruto’s administration.
In its November 2026 Kenya Economic Update released on Wednesday, November 4, the global lender said the economy expanded by 5.2 per cent in the first six months of the year, up from 4.9 per cent recorded during a similar period in 2025.
The improved performance was supported by stronger activity in the industrial and services sectors, which helped offset slower growth in agriculture.
The World Bank reported that industrial growth accelerated to 4.9 per cent from 4.3 per cent in the first half of 2025. Construction grew by 6.3 per cent, while manufacturing improved to 3.3 per cent from 2.1 per cent.
The construction sector benefited from increased activity in cement and galvanised sheet production, while manufacturing growth was supported by food and beverage production and vehicle assembly.
The services sector also maintained positive growth, expanding by 5.2 per cent compared to 5.1 per cent in the same period last year.
Accommodation and restaurant activities recorded an 11.1 per cent growth, supported by continued recovery in tourism. Information and communication activities grew by 6.1 per cent, while transport and storage expanded by 4 per cent.
The improved performance prompted the World Bank to revise its economic growth forecast for Kenya in 2026 upwards by 0.3 percentage points, from 4.3 per cent to 4.6 per cent.
The lender said the upward revision reflected stronger-than-expected economic activity during the first half of the year.
Private sector activity also showed signs of improvement, with credit growth reaching 10.6 per cent in September 2026. Foreign direct investment inflows rose by 170.5 per cent to a record KSh355 billion (US$2.74 billion) in the 12 months to September 2026.
The report also noted improvements in employment, with total employment expanding by 4 per cent in 2025. Formal wage employment grew by 3.1 per cent, up from 1.8 per cent in 2024, while real wage earnings increased by about 2 per cent.
However, the World Bank cautioned that the gains in employment remained limited by the dominance of informal jobs, which accounted for 83.8 per cent of total employment.
Despite the improved economic outlook, the lender warned that rising public debt, corruption, higher energy costs and unpredictable weather could weigh on future growth.
It projected the economy to expand by 4.4 per cent in 2027 before recovering to 4.8 per cent in 2028.
The report further called for stronger governance, improved public spending controls and reforms to address corruption, which it identified as a major constraint to faster and more inclusive economic growth.
