Treasury CS Mbadi outlines Kenya’s economic outlook amid Middle East tensions
By Kiprono Keileb, April 2, 2026Treasury Cabinet Secretary John Mbadi has raised concerns over rising global tensions in the Middle East, even as he maintained that Kenya’s economy remains stable and on track despite external risks affecting many countries.
The CS was speaking on Thursday, April 2, 2026, during a meeting with the National Assembly Committee on Finance and Planning, where he outlined the country’s economic outlook and emerging threats.
Mbadi pointed out the growing instability in the global economy, warning that ongoing tensions in the Middle East are already putting pressure on key sectors such as energy, trade, and financial systems across the world.
“The global economic outlook is under pressure due to escalating Middle East tensions, with risks to energy markets, trade, and financial stability,” the statement reads.
Speaking out about Kenya’s economic performance, Mbadi noted that despite global uncertainty, the country is still recording steady growth supported by key sectors and ongoing reforms.
“Kenya’s economy remains resilient, with growth projected at 5.3% in 2026 and 2027, supported by agriculture recovery, a strong services sector, and ongoing economic reforms,” the statement reads.
The CS also pointed out the signs of stability within the country’s financial environment, saying key indicators such as inflation and interest rates are showing positive trends that support economic confidence.
“Macroeconomic stability has been sustained, with inflation at 4.3%, declining interest rates, a stable exchange rate, and strong foreign exchange reserves,” the statement reads.
Mbadi went on to acknowledge the continued role of Kenyans living abroad, noting that diaspora remittances remain a strong pillar in supporting households and the wider economy.
“Diaspora remittances remain robust at USD 5.05 billion, continuing to support the economy and external sector stability,” the statement reads.
He also pointed to improved performance in the capital markets, saying recent gains at the Nairobi Securities Exchange reflect growing investor confidence.
“Capital markets have strengthened significantly, with notable growth in the NSE index and overall market capitalisation,” the statement reads.
On government spending, Mbadi told lawmakers that budget implementation is progressing, although revenue collection has not fully met expectations.
“Budget implementation is on course, with improved revenue performance, though still below target, and a fiscal deficit of 3.7% of GDP,” he stated.
Talking about the issue of global risks, warning that the Middle East conflict could directly affect Kenya through rising fuel prices and disruptions in supply chains.
“The Middle East conflict poses key risks, including rising oil prices, potential fuel cost increases, and disruptions to trade, exports, and supply chains,” the statement reads.
The CS explained that several sectors within the country remain exposed to such shocks, especially those that depend heavily on stable international markets and logistics systems.
“Key sectors such as agriculture, livestock, tourism, and exports are vulnerable to external shocks and logistics disruptions,” the statement reads.
Mbadi assured the committee that the government has already put in place measures to cushion the country against possible economic shocks and maintain stability.
“The Government has put in place mitigation measures, including the Fuel Stabilisation Fund, export market diversification, and targeted support to sustain economic activity,” the statement reads.
He further noted that Kenya is also looking at opportunities that may arise from the shifting global environment, particularly in logistics and trade routes.
“Kenya is also positioning itself to benefit from emerging opportunities, including increased use of Lamu Port as a regional logistics hub,” the statement reads.
He concluded by reaffirming the government’s commitment to maintaining stability while ensuring growth benefits reach more Kenyans across different sectors of the economy.
“Mbadi told the Parliamentary Committee that the Government remains committed to maintaining macroeconomic stability, strengthening fiscal sustainability, and driving inclusive economic growth,” the statement reads.