PS Chris Kiptoo: Kenya’s economy grew by 4.9% in Q1 2025
By Ascah Mwango, September 20, 2025Treasury Principal Secretary Chris Kiptoo has lauded Kenya’s economic resilience, noting a 4.9 per cent growth in the first quarter of 2025.
Speaking on Friday, September 19, 2025, Kiptoo said the financial and insurance sector had expanded by 7.6 per cent in 2024. However, with insurance penetration standing at just 2.3 per cent of GDP, he stressed that much more needed to be done to drive inclusive growth.
“Kenya’s economy remains resilient, recording 4.9 per cent growth in Q1 2025, with the financial and insurance sector expanding by 7.6 per cent in 2024. Yet, with insurance penetration at just 2.3 per cent of GDP, the challenge and opportunity are clear: we must extend coverage to underserved communities and key sectors such as agriculture and SMEs to drive inclusive growth,” Kiptoo said.
The PS underscored the critical role of insurance and reinsurance in strengthening financial stability.
Kiptoo further pledged the government’s commitment to creating an enabling environment for innovation and inclusion in the sector. He called for bold and affordable solutions, including digital products, index-based agricultural insurance, and SME-focused covers, to protect livelihoods, reduce poverty, and spur sustainable development.
World Bank prediction
This comes amid a prediction by the World Bank, which revised Kenya’s economic growth forecast for 2025 downwards to 4.5 per cent, citing fiscal pressures, tight global financial conditions, and sluggish private sector investment.
The lender noted that Kenya’s economy expanded by 4.5 per cent in 2024, a slowdown from 5.6 per cent the previous year, as rising debt levels, high interest rates, and weak private sector credit dampened momentum.
According to the World Bank’s latest Kenya Economic Update, growth is expected to gradually recover in the medium term, averaging around 4.9 per cent between 2025 and 2027, supported by ongoing investments in infrastructure, agriculture, and services.
However, the Bank cautioned that several risks could weigh on the outlook. Kenya’s public debt, estimated at more than 65 per cent of GDP, continues to constrain fiscal space, while global financing conditions remain tight. At the same time, credit to the private sector has stagnated, limiting opportunities for expansion and job creation.
External shocks, including adverse weather, inflationary pressures, and global trade disruptions, also remain a concern. The World Bank emphasised the need for Kenya to adopt policies that strengthen fiscal consolidation, expand social protection, and boost private investment to sustain inclusive growth.
The revised forecast comes as the government faces the twin challenge of stimulating economic activity while managing rising debt repayments.