Industry, services lift Kenya’s Q1 economic growth to 5.3%
By Faith Lagat, July 12, 2026Kenya’s economy expanded by 5.3 percent in the first quarter of 2026, up from 4.9 percent in the corresponding period of 2025, supported by stronger performance in the industry sector and sustained growth in services.
According to the Central Bank of Kenya (CBK) Weekly Bulletin released on July 10, 2026, “The performance of the economy improved in the first quarter of 2026, with a pickup in real GDP growth to 5.3 percent compared to 4.9 percent in the corresponding quarter of 2025.”
The bulletin attributes the improved performance to a rebound in industry and continued resilience in services, while agriculture maintained positive growth despite a slight slowdown.
This comes amid expectations of a gradual recovery in economic activity following lower interest rates, improved performance in tourism and construction, and continued expansion in financial services.
The KNBS report shows that while inflation edged up and the current account deficit widened during the quarter, growth was recorded across all sectors of the economy, pointing to sustained activity in key productive areas.
Industry records stronger growth
The industry sector grew by 5.4 percent in the first quarter of 2026 compared to 4.0 percent during the same period last year.
CBK said the improvement was supported by stronger growth in manufacturing, construction, and mining and quarrying. Manufacturing expanded by 4.4 percent from 2.8 percent a year earlier, while construction rose to 6.6 percent from 4.5 percent. Mining and quarrying recorded growth of 9.1 percent.
The agriculture sector expanded by 4.9 percent, compared to 5.3 percent in the first quarter of 2025. Overall, non-agriculture activities grew by 5.3 percent, reflecting improved performance across key sectors of the economy.
Services sector remains resilient
The services sector, Kenya’s largest contributor to economic output, expanded by 5.5 percent compared to 5.0 percent in the first quarter of 2025.
Growth was supported by accommodation and food services, which expanded by 14.7 percent from 8.0 percent a year earlier. Finance and insurance grew by 6.3 percent from 5.3 percent, while real estate rose to 5.0 percent from 4.6 percent. The education sector also recorded stronger growth of 6.2 percent compared to 1.8 percent in the corresponding period last year.
Other sectors that registered positive growth included wholesale and retail trade, information and communication, public administration, and health services.
Global outlook remains challenging
The Kenya National Bureau of Statistics data cited in the CBK bulletin shows the economy continued the recovery recorded in 2025, when annual real GDP growth stood at 4.6 percent.
The bulletin noted that the International Monetary Fund projects global growth to moderate to 3.0 per cent in 2026 from 3.5 per cent in 2025, mainly reflecting the impact of higher energy prices linked to the conflict in the Middle East.
CBK also said inflationary pressures have eased across most advanced economies, particularly in the Euro Area, while Murban crude oil prices increased to Ksh9,350.84 per barrel on July 9, 2026 from about Ksh8,797.90 per barrel a week earlier, following renewed tensions in the Middle East.