IMF projects Kenya's inflation easing to 5% in 2027, growth at 4.7%

The International Monetary Fund (IMF) projects that Kenya's average annual inflation will ease to 5% in 2027 from 6% in 2026, while real GDP growth is put at 4.7% in 2027 after 4.5% in 2026, Business Daily reported on 13 October 2026. Capital FM reported the same growth path on 13 October.

The IMF published its October 2026 World Economic Outlook on 13 October, during the 2026 IMF and World Bank Annual Meetings in Bangkok, Thailand. The IMF's online database for Kenya shows growth of 4.5% for 2026 and 4.7% for 2027, with inflation at 6% in 2026 and 5% in 2027. For 2025 it shows growth of 4.6% and inflation of 4.1%.

The 4.5% growth figure for 2026 is unchanged. Business Daily reported on 16 April 2026 that the IMF had cut its 2026 forecast for Kenya to 4.5% from 4.9%, citing higher energy costs linked to the Middle East war, which broke out at the end of February 2026.

The IMF figures are annual averages. The Kenya National Bureau of Statistics (KNBS) put year-on-year inflation at 6.8% in September 2026, up from 6.6% in August, Nairametrics, a Nigerian financial website, reported on 30 September. KNBS put inflation for food and non-alcoholic beverages at 9.5% and transport at 15.6% in September.

The IMF also expects Kenya's current account deficit to narrow to 4.1% of GDP in 2027 from a projected 5.4% in 2026, Business Daily reported. The current account deficit is the gap between what a country pays abroad for imports and other payments and what it earns from the rest of the world.

The Fund expects the average oil price to fall to US$87.39 a barrel in 2027 from US$95.74 in 2026, Capital FM reported on 13 October.

Business Daily said the National Treasury expects the budget deficit to rise to 5.9% of GDP in the 2027/28 financial year from 5.5% in 2026/27. Ken Gichinga, chief economist at Mentoria Economics, said, as quoted by Business Daily on 13 October: "Heavy government borrowing will crowd out the private sector."

Churchill Ogutu, an economist, said, as quoted by Business Daily on 13 October, "The economy is showing some resilience as we head into 2027." He pointed to prolonged geopolitical tensions that could worsen the energy price shock, El Niño threatening agriculture, and Ebola as risks. Business Daily reported that inflation rose to 7.66% in 2022 amid global commodity shocks and drought.

Capital FM reported on 13 October that Treasury Cabinet Secretary John Mbadi met Eric Meyer, Deputy Assistant Secretary for Africa and the Middle East at the US Treasury Department, on the sidelines of the 2026 IMF and World Bank Annual Meetings in Bangkok. They discussed Kenya's economic outlook and its engagement with the IMF, the Business Laws (Amendment) Act, remittances from the US, health cooperation and possible US Treasury technical help on digital assets.

The Treasury did not announce any new funding agreements or financial commitments after the meeting, Capital FM reported. An IMF mission is expected in Nairobi in early December 2026 for the Article IV consultations, the Fund's regular review of a member country's economic policies.