Why did the World Bank revise Kenya's 2025 economic growth forecast downward, and what is the new projection?

The World Bank revised Kenya's 2025 economic growth forecast downward by 0.6 percentage points to 4.3% due to the impact of the U.S.-Israeli war on Iran, which has driven up global energy prices, increased uncertainty, raised production costs, weakened private investment growth, and reduced household purchasing power through higher commodity prices and moderating remittance inflows.

What are the main near-term risks to Kenya's economy identified by the World Bank, and how might they affect poverty levels?

The World Bank identifies three main near-term risks: fallout from the Middle East conflict (causing higher fuel and commodity prices), climate-related shocks, and political uncertainty linked to the August 2027 general elections — which may delay private investment, increase policy uncertainty, slow structural reforms, weaken fiscal discipline, and erode business and consumer confidence; these factors, especially higher fuel prices, could push Kenya's poverty rate up by 2 to 4.5 percentage points, pushing an additional 1 million to 2.4 million Kenyans below the $3 per person per day poverty line.

Kenya Economy Growth Forecast Revised Down by World Bank Amid Rising Energy Costs

Jul 9, 2026

The World Bank lowered Kenya's GDP growth forecast to 4.3% for 2026, citing higher global energy and commodity prices caused by Middle East conflicts as key risks.

reuters

2026-07-09

World Bank Forecasts Weakest Kenyan Growth Since Pandemic Amid Iran Conflict

2026-07-09

Kenya Economy Growth Forecast Revised Down by World Bank Amid Rising Energy Costs

Kenya Economy Growth Forecast Revised Down by World Bank Amid Rising Energy Costs

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