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Kenya’s economy grew 5.2% in the first half of 2026 and foreign direct investment hit a record US$2.74 billion, but the World Bank says corruption is holding growth back. The findings are in the World Bank’s 34th Kenya Economic Update, launched in Nairobi on 4 November 2026. The FDI figure was reported by The Star on 7 November.
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Kenya Economic Update: key numbers
- Growth: 5.2% in the first half of 2026, up from 4.6% for 2025, led by industry and services.
- FDI: up 170.5% to US$2.74 billion (about KSh 354 billion) in the 12 months to September 2026, The Star reports from the update. Portfolio inflows rose 54.6%.
- Reserves: about US$14.7 billion, roughly 5.9 months of import cover.
- Jobs: 83.8% of jobs remain informal.
- Public finances: last fiscal year’s deficit was 6.8% of GDP against a 4.7% target; public debt was 72.3% of GDP in August 2026, and interest takes about a third of revenue.
The Star adds that construction grew 6.3% in the first half, accommodation and restaurants 11.1%, and private-sector credit growth reached 10.6% in September.
Growth forecast for 2026 to 2028
The World Bank expects growth to slow in the second half, bringing 2026 to 4.6%. Reuters reported that this was raised from 4.3%. Without ambitious reforms it sees 4.4% in 2027 and 4.8% in 2028, with risks from the Middle East conflict’s effect on fuel and shipping costs, and from weather shocks. Treasury PS Chris Kiptoo told Reuters the government expects at least 5% this year.
The governance warning in the Kenya Economic Update
The update’s main theme is governance. The bank says addressing governance constraints could lift GDP by up to 20% by 2035, and Reuters quoted it calling corruption “the key binding constraint”.
What it means for businesses and savers
Strong reserves and capital inflows have helped keep the shilling steady, as our latest CBK weekly bulletin report shows. But a large deficit and high interest costs keep government borrowing heavy, which supports Treasury yields. Inflation is another pressure point; see our report on October inflation.
Frequently asked questions
How fast did Kenya’s economy grow in 2026?
5.2% in the first half of 2026, according to the World Bank. It forecasts 4.6% for the full year.
How much foreign direct investment did Kenya get?
A record US$2.74 billion in the 12 months to September 2026, up 170.5%, according to The Star’s report on the update.
What is the Kenya Economic Update?
A twice-yearly World Bank report on Kenya’s economy. The 34th edition was launched on 4 November 2026.
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