Kenya's economic landscape in 2024 was marked by a series of challenges and policy shifts, reflecting both internal and external pressures. The World Bank revised Kenya's economic growth forecast for 2024 to 4.7%, down from the initial 5.0%, attributing the downgrade to factors such as floods, anti-government protests, and ongoing fiscal challenges. Despite stabilising its foreign exchange rate and increasing central bank reserves, Kenya continues to face high debt distress, with concerns over elevated debt servicing costs and unmet revenue targets. ​ In the third quarter of 2024, Kenya's GDP expanded by 4.0% year-on-year, a slowdown from 6.0% in the same period of 2023. This deceleration was primarily due to contractions in the construction sector, which shrank by 2.0%, and the mining and quarrying sector, which decreased by 11.1%. However, sectors such as agriculture, transportation, financial services, real estate, wholesale and retail, and accommodation helped mitigate the overall slowdown. ​ In response to the economic slowdown, Kenya's central bank reduced its benchmark lending rate by 50 basis points to 10.75% in February 2025, aiming to stimulate growth as inflation remained controlled. This marked the fourth consecutive rate cut by the Central Bank of Kenya. The Monetary Policy Committee cited stable food and fuel inflation and a steady exchange rate as reasons for the decision, expecting inflation to stay within the target range of 2.5% to 7.5%. Kenya's private sector activity showed slight expansion in February 2025, with the Stanbic Bank Kenya Purchasing Managers' Index (PMI) rising marginally to 50.6 from 50.5 in January. While the index remained above the 50.0 threshold indicating growth, the rate of expansion was modest. The finance ministry projected growth to improve in 2025 after slowing to 4.6% in 2024 from 5.6% in 2023. The proposed Kenya Finance Bill 2024, which aimed to increase taxes to raise 346 billion Kenyan shillings for debt repayment and development projects, faced significant public opposition. Protests, led predominantly by younger Kenyans mobilising through social media platforms like TikTok and X, erupted nationwide. The demonstrations escalated on 25 June 2024, when protesters stormed the Kenyan Parliament Building in Nairobi, resulting in at least 19 deaths and numerous injuries. In response to the unrest, President William Ruto rejected the Finance Bill on 26 June and ordered a 999 billion Kenyan shilling budget cut. Amidst high unemployment rates and youth unrest, President Ruto encouraged young people to seek employment opportunities abroad. Initiatives included agreements for Kenyan workers to fill labor shortages in countries like Germany, Canada, and several Arabian Peninsula states. While this policy aimed to alleviate domestic unemployment and boost remittances, critics expressed concerns over potential "brain drain" and its long-term impact on Kenya's development. ​ The suspension of USAID funding by President Donald Trump severely impacted Kenya's economy, particularly in aid-dependent areas like Kisumu and Nairobi. The freeze disrupted operations in sectors such as healthcare, affecting essential services like AIDS, tuberculosis, and malaria treatment. The Kenyan government is exploring alternative donor options, particularly from Scandinavian countries, to mitigate the impact and recalibrate its external relations.​ Kenya's economic trajectory in 2024 shows the intricate balance between fiscal policy, social stability, and external dependencies. The government's responses to these challenges will be pivotal in shaping the nation's economic and social landscape in the coming years.

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