Official Optimism Meets Public Pessimism

NAIROBI – The Kenyan government, supported by international financial institutions, has painted a picture of a steadily recovering economy in 2025. Projections from the African Development Bank suggest a GDP expansion of 5.6% this year, an improvement from 2023. Similarly, the Kenya National Bureau of Statistics (KNBS) reported that the annual inflation rate stood at a manageable 4.6% in October 2025, remaining within the central bank's target range for the 17th consecutive month. These figures suggest a stable macroeconomic environment, with official data attributing the positive outlook to a rebound in agriculture and a resilient services sector.

The View from the Street

However, this official narrative is starkly at odds with the daily experiences of most citizens. A series of recent public opinion polls reveals widespread economic dissatisfaction. A September 2025 survey by Infotrak found that 79% of Kenyans feel the cost of living has worsened compared to the previous year, with 40% blaming increased taxation. Another poll from Tifa Research in September indicated that 62% of Kenyans believe the country is headed in the wrong direction, a significant increase from 48% in 2023. These sentiments are fueled by the high cost of necessities like food, transport, and energy, which continue to strain household budgets despite the moderate official inflation rate. Low-income earners, who spend over 60% of their income on food, are the most affected.

Unemployment and the Informal Sector Challenge

A critical piece of the puzzle is the labour market. While the government's 2025 Economic Survey noted the creation of 782,300 new jobs in 2024, it also highlighted that a staggering 90% of these were in the informal sector. Jobs in the "jua kali" sector often lack stability, benefits, and decent wages, leaving many workers underemployed and vulnerable to economic shocks. The unemployment rate is projected to be around 5.2% in 2025, a slight improvement from previous years. However, this figure belies the severe challenge of youth unemployment, with the Federation of Kenyan Employers (FKE) reporting that up to 67% of Kenyans aged 15-34 are without jobs.

Explaining the Disconnect

Economic analysts point to several factors driving the disconnect between macroeconomic data and public perception. Dr. Emmanuel Juma, a (fictional) senior economist at the Nairobi Institute for Economic Affairs, explains: “GDP growth measures the total output of an economy, but it doesn't tell us how those gains are distributed. Growth can be concentrated in sectors that don't create many jobs, or the profits may benefit a small segment of the population, leaving the majority behind.” This sentiment is echoed in a 2025 Afrobarometer survey, where 76% of Kenyans gave the government a poor rating on creating jobs, and 79% on narrowing the gap between rich and poor. The heavy burden of public debt also plays a role, with interest payments consuming about a third of tax revenue, limiting funds for development and social spending. While the World Bank projects Kenya's economy will grow, it also notes risks from policy uncertainty and high interest rates that constrain investment and formal job creation.

Conclusion: A Tale of Two Economies

The divergence between official statistics and the lived reality of Kenyans highlights a tale of two economies. One is the economy of national averages and positive growth forecasts presented by institutions. The other is the household economy, where rising prices for basic goods, stagnant wages, and a precarious job market are the dominant realities. As Kenya navigates its recovery path, the challenge for policymakers is to bridge this gap and ensure that the benefits of economic growth translate into tangible improvements in the lives of ordinary citizens. Without inclusive policies that address the cost of living, create stable employment, and tackle inequality, the numbers will continue to tell only half the story.