Kenya’s captains of industry are betting on a resurgence, projecting GDP growth of up to 5.2% this year as inflation cools and the shilling stabilizes against the dollar.

The clouds over Kenya’s economy are finally parting, with the private sector forecasting a robust recovery that could see Gross Domestic Product (GDP) expand by 5.2 percent in 2026. This bullish outlook was the headline takeaway from the 2026 Economic Outlook Forum, where business leaders gathered to chart the path forward after a turbulent 24 months of fiscal shocks and global instability.

Speaking at the forum, leaders from the Kenya Private Sector Alliance (KEPSA) and KPMG painted a picture of "cautious optimism." They cited the easing of inflation to within the central bank's target range of 3-5 percent as the primary catalyst for renewed business confidence. The stability of the Kenyan shilling, which has regained ground against major world currencies, has also reduced the cost of inputs for manufacturers, fueling hopes of a production boom.

Growth Drivers

The projected growth is not expected to be uniform but will be driven by specific high-performance sectors. Agriculture, recovering from drought, and a resilient services sector are tipped to lead the charge. However, the private sector warned that government policy remains the biggest wildcard, urging the state to maintain tax stability to allow businesses to plan.

• Inflation Taming: The drop in consumer prices is expected to boost household spending power, reigniting demand for goods and services.
• Credit Access: Business leaders emphasized the need for affordable credit, calling on banks to lower interest rates in line with the improving macroeconomic environment.

The Road Ahead

Despite the optimism, risks remain. Global geopolitical tensions and the high cost of energy were flagged as potential headwinds that could derail the recovery. "We are out of the ICU, but we are not yet out of the hospital," one analyst noted. The 5.2 percent target is ambitious, but for a private sector that has survived the worst, it represents a glimmer of hope that 2026 will be the year Kenya gets back to business.

The message from the boardroom is clear: the fundamentals are strong, but the government must not rock the boat with erratic tax policies. If the partnership holds, 2026 could be a vintage year.