The World Bank has revised Kenya’s economic growth forecast for 2026 to 4.3%, down from its November projection, citing the economic impact of the US-Israeli war on Iran. Growth is expected to edge up to 4.4% in 2027, compared with 4.6% in 2024.
In its latest economic update released on Thursday, the World Bank said higher global energy prices, rising production costs and weaker private investment could weigh on growth, although strong agricultural output, easing monetary policy, a stable exchange rate and improving private sector credit are expected to provide some support.
The bank warned that the aftermath of the Middle East conflict could increase Kenya’s poverty rate by 2 to 4.5 percentage points, pushing an estimated one million to 2.4 million more people below the $3-a-day poverty line.
It also highlighted climate-related shocks and political uncertainty ahead of Kenya’s August 2027 general elections as key risks to the economy. The warning comes after the World Bank approved a $750 million budget-support loan and a $500 million sustainability-linked financing package for Kenya in late June.