World Bank Revises Kenya’s Economic Growth Forecast Upward to 4.9% Amid Construction Sector Recovery

 

The World Bank has revised Kenya’s economic growth projection upward to 4.9%, buoyed by a strong rebound in the construction sector and renewed momentum in infrastructure development. The updated outlook reflects growing confidence in Kenya’s ability to stabilize its economy despite fiscal pressures, high living costs, and global economic uncertainty. The construction industry—long a key engine of Kenya’s GDP—has shown notable resilience as both government and private investors accelerate projects in transport, housing, energy, and urban development. Major road upgrades, affordable housing initiatives, water projects, and improvements in power transmission have collectively helped revive activity across the sector, stimulating demand for materials, labor, and related services.

According to the World Bank, the recovery in construction is not only driving direct economic output but also creating ripple effects in manufacturing, trade, logistics, and financial services. The renewed focus on infrastructure aligns with Kenya’s broader development agenda, including expanding affordable housing, enhancing mobility in urban centers, and upgrading critical national infrastructure. Investor confidence has also been lifted by improved access to financing for developers, easing inflationary pressures, and greater clarity around government policy priorities. These improvements have helped stabilize the business environment after a challenging period marked by high borrowing costs and delayed project execution.

The 4.9% growth forecast also reflects encouraging signs in other sectors such as agriculture, services, ICT, and manufacturing—although construction remains the standout contributor to the upward revision. Urbanization continues to drive demand for commercial and residential spaces, while advancement in mega-projects has boosted employment and stimulated local supply chains. The World Bank highlights that Kenya’s diversification efforts and commitment to structural reforms are beginning to yield positive outcomes, even as the country works to address vulnerabilities related to public debt and external shocks.

Looking ahead, sustaining the momentum will depend on continued investment in infrastructure, timely implementation of public projects, and strengthening public–private partnerships. The construction sector is expected to remain a cornerstone of Kenya’s economic trajectory, supporting long-term growth and contributing to improvements in productivity and social welfare. With the revised 4.9% forecast, the World Bank signals cautious optimism that Kenya is on a recovery path—one anchored by strategic infrastructure expansion and broader economic resilience.

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