Economy stagnates in early 2025 despite agricultural boost

Among the sectors that recorded reduced activity were transport, hospitality, financial services, and communication.
Kenya’s economy registered a growth of 4.9 per cent in the first three months of 2025, maintaining the same pace as recorded in the first quarter of 2024, according to the latest figures from the Kenya National Bureau of Statistics (KNBS).
The performance reflects a balancing act, as some sectors slowed down while others saw modest gains.
Among the sectors that recorded reduced activity were transport, hospitality, financial services, and communication.
Transport and storage expanded by 3.8 per cent, down from 4.1 per cent, while accommodation and food services sharply dropped to 4.1 per cent growth compared to 38.1 per cent in the first quarter of 2024.
The information and communication sector followed the same pattern, slowing from 9.2 per cent to 5.8 per cent, while the financial and insurance sector dipped to 5.1 per cent from 9.6 per cent.
However, agriculture remained a bright spot, with the sector growing by six per cent, up from 5.6 per cent during a similar period last year.
According to KNBS, favourable weather conditions boosted output in several agricultural sub-sectors, helping to drive growth.
“The quantity of milk deliveries to processors increased from 218.8 million litres in the first quarter of 2024 to 250.6 million litres in the period under review. Similarly, coffee exports increased from 9,722.3 metric tonnes in the first quarter of 2024 to 16,894.4 metric tonnes in the corresponding quarter of 2025,” said KNBS Director General Macdonald Obudho.
The manufacturing sector recorded a slight rise, with Gross Value Added growing by 2.1 per cent compared to 1.9 per cent a year ago.
The electricity and water sectors also improved, recording a combined 3.6 per cent growth, up from 2.8 per cent.
Construction, which had been sluggish, registered a recovery with three per cent growth, up from just 0.4 per cent in the same quarter of 2024. The improvement was driven by increased demand for construction inputs like cement, steel and iron.
Although the overall economic growth remained unchanged, the numbers reflect a shifting trend, with agriculture and construction providing momentum amid slower performance in service-related sectors.