Consumer spending in the country is predicted to rise by 4 percent while consumer price inflation is likely to stabilize at 4.8 percent, offering much-needed relief to households and businesses.
This moderation creates opportunities for sustained consumer spending, particularly in essential sectors such as food, healthcare, and education.
Women’s workforce participation in the country also reflects this important and steady transformation aligning with global patterns where women’s workforce participation has exceeded pre-pandemic levels in many regions.
The country’s GDP this year is also projected to grow by 4.7 percent supported by a robust remittance ecosystem and high female labor force participation, which continues to drive household incomes.
According to an annual report of the Mastercard Economics Institute, ‘Economic Outlook 2025,’ released today, the GDP growth outpaces the global average which is forecast at 3.2 percent a modest increase on 3.1 percent last year.
Khatija Haque, chief economist, Mastercard Europe, the Middle East and Africa (EEMEA), said the report highlights Kenya’s potential for robust growth, underpinned by high remittance inflows, active female workforce participation, and digital transformation.
In Kenya, the female labor force participation rate stood at 72.5 percent in 2022, one of the highest rates globally.
The reports show that the rise of remote work and the flexibility tends to help women, who are often still the primary caregivers easily raise children while working, and thus many of these dynamics will remain true in 2025, with positive implications for the economy due to driving consumption growth by increasing households’ disposable incomes.
“These trends position the country as a leader in fostering inclusive and sustainable development and Kenya’s economy demonstrating resilience amid global shifts, leveraging digital innovation and regional trade integration to sustain progress”, Haque added
Shehryar Ali, Senior Vice President and Country Manager for East Africa and Indian Ocean Islands at Mastercard said Kenya’s digital evolution is accelerating at a fast pace, and Mastercard is committed to driving this transformation.
“As the ‘Silicon Savannah,’ Kenya leads in innovation, and we’re enhancing acceptance with tokenization, wearables, and contactless payments,” she said, adding that these solutions, along with their first multi-currency prepaid card, streamline payments and empower communities to engage confidently in global commerce.
Economic recovery and local reforms the report says are expected to sustain remittance growth through 2025, while the continued digitization of the payments industry allows recipients to shift to digital and mobile channels, resulting in considerable cost efficiencies, security and convenience.
In Kenya, according to the report, migration continues to shape the country’s economic landscape, significantly contributing to remittance inflows.
In 2023, remittances accounted for 3.9 percent of GDP, up from a pre-pandemic average of 2.3 percent, underscoring their critical role in supporting household incomes and economic resilience.
Kenya’s robust mobile money infrastructure, led by platforms like M-Pesa, has further enhanced the efficiency and accessibility of remittances.
“These platforms facilitate secure and convenient cross-border transactions, reducing costs and empowering underserved communities,” the outlook says.
The global economy has managed through a series of shocks admirably over the past few years and today Mastercard Economics Institute released ‘Economic Outlook 2025,’ anticipating 2025 to be defined by shifts in monetary and fiscal policy and a move toward equilibrium rates for growth and inflation.
By Wangari Ndirangu
