Kenya's economy is picking up speed. According to data published by the Kenya National Bureau of Statistics (KNBS), GDP expanded by 5.3% in the first quarter of 2026, up from 4.9% in the same period of 2025 — one of the strongest performances across East Africa in recent quarters.
Tourism and construction lead the charge
The accommodation and food services sector posted the most striking figure: +14.7% in Q1 2026, compared with 8.0% a year earlier. International tourist arrivals surged 13.1%, confirming Kenya's status as the continent's leading tourism destination. Construction followed closely at +6.6% — cement consumption rose 17.9% and credit to the sector jumped from KES 157.3 billion to KES 200.6 billion. Financial services (+6.3%) and agriculture (+4.9%) rounded out a broad-based expansion.
Manufacturing, long a weak spot, rebounded to +4.4% (from 2.8% in 2025), driven by an 18.1% jump in vehicle assembly output.
More jobs, but inflation concerns
For full-year 2025, Kenya's real GDP grew 4.6%, lifting nominal GDP to KES 17,577.6 billion (roughly USD 135 billion). The economy generated 822,100 net new jobs — 82.7% in the informal sector. GDP per capita rose to KES 329,594 from KES 309,609.
The main concern is inflation, which edged up to 4.35% in Q1 2026 (from 3.45% previously) on the back of food prices, alongside a widening current account deficit — two variables to watch closely.
Why it matters
For Indian Ocean investors and operators, Kenya's resilience sends a clear signal. Nairobi remains the gateway to East Africa: its service, tourism, and construction boom opens concrete opportunities for Reunionese, Mauritian, and Malagasy companies targeting a market of 57 million consumers. The Q1 2026 trajectory shows the recovery cycle is firmly on track.
Sources: Kenya National Bureau of Statistics (KNBS) – Economic Survey 2026; People Daily, 2026; Nairobi News, 2026.