Mastercard Economics Institute’s 2025 Economic Outlook for Kenya:…

The Mastercard Economics Institute’s report predicts a 4.7% GDP growth for Kenya in 2025, alongside a 4% rise in consumer spending and stabilization of inflation at 4.8%. Key drivers include strong remittance inflows, high female workforce participation, and advancements in digital payment systems, all of which position Kenya favorably for inclusive economic growth.

The Mastercard Economics Institute has published its ‘Economic Outlook 2025’ report, which identifies critical themes shaping the global economic landscape. For Kenya, GDP growth is projected at 4.7%, surpassing the global average of 3.2%. In addition, consumer spending is anticipated to rise by 4% alongside consumer price inflation stabilizing at 4.8%. These trends are expected to relieve households and businesses considerably, amidst ongoing global shifts.

Economic growth in Kenya is bolstered by robust remittances and a high participation rate of women in the workforce, demonstrating resilience amid global economic changes. The country is effectively leveraging digital advancements and regional trade to maintain economic progress. Khatija Haque, Chief Economist for EEMEA at Mastercard, emphasized that “Kenya’s economic outlook for 2025 highlights its potential for robust growth,” underlined by significant remittance inflows and women’s participation in the economy.

Shehryar Ali, Senior Vice President and Country Manager for East Africa and Indian Ocean Islands at Mastercard, remarked on Kenya’s rapid digital evolution stating, “As the ‘Silicon Savannah,’ Kenya leads in innovation… enhancing acceptance with tokenization, wearables, and contactless payments.” This continuous support not only streamlines payments but also empowers local communities to participate in the global economy effectively.

The report highlights consumer behaviors, pointing out that globally, consumers have faced rising prices due to pandemic-related factors and geopolitical tensions. For Kenya, the forecast of inflation stabilizing at 4.8% aligns with observed global trends, creating openings for sustained consumer spending in vital sectors such as food and healthcare. However, the lingering price pressures have led consumers to opt for more affordable products, a trend predicted to be reflected in a real consumer spending growth of 4% in 2025.

Moreover, the increase in global remittances due to migration has been key in supporting low- and middle-income communities. The World Bank reports that global remittances grew significantly, with Kenya’s remittances accounting for 3.9% of its GDP in 2023. This surge emphasizes the importance of digital payment methods, like M-Pesa, in facilitating secure transactions and reducing costs for recipients, thereby empowering communities.

Another theme is the rising participation of women in the workforce, termed the SHEconomy. In Kenya, female workforce participation reached 72.5% in 2022, one of the highest rates globally. This increase is attributed to job creation in sectors like education and healthcare, along with the flexibility afforded by remote work, which often supports women who balance caregiving and employment.

In conclusion, the Mastercard Economics Institute’s Economic Outlook for 2025 presents an optimistic view of Kenya’s economic landscape, supported by promising growth in GDP, consumer spending, and remittances. With strong female participation in the workforce and innovation within the financial sector, Kenya is well-positioned for sustainable development in the coming years. The trends identified reveal important shifts that will continue to shape the economy, fostering resilience and inclusive growth.

Original Source: www.africa.com