Kenya’s Gross Domestic Product (GDP) grew by 5.0% in the second quarter of 2025, driven by expansion across Agriculture, Transportation and Storage, and Financial sectors, alongside Construction, Mining, and Quarrying activities.
Key Highlights
- GDP expanded by 5.0% compared to 4.6% in the same period last year.
- Agriculture, Forestry, and Fishing activities grew by 4.4%.
- Mining and Quarrying grew by 15.3%
- Manufacturing marginally expanded by 1.0%
- Transportation and Storage grew 5.4%.
- The financial and insurance sector expanded by 6.6%.
Expansion in Agriculture, Forestry, and Fishing activities was boosted by increased production in coffee, vegetables, fruits, cut flowers, and milk. In the period under review, coffee exports amounted to 20,041.7 tonnes, up 26%. Vegetables increased by 10.1% equivalent to 7,307 metric tonnes, to reach 79,431.8 metric tonnes, while fruits increased by 31.5% to 1,867.8 metric tonnes.
Cut flower exports recorded the highest increase at 33.1% to 32,493.5 metric tonnes in the quarter under review. Likewise, milk consumption rose by 24.1% to 272 million litres, from 219.2 million litres in the second quarter of 2024. However, tea, one of Kenya’s major exports and key GDP contributor, fell by 5.3% to 146.3 thousand metric tonnes in the quarter under review.
The construction sector staged a strong comeback in the second quarter, expanding 5.7% after last year’s slump, driven by a 23.9% surge in cement consumption to 2,424.4 thousand metric tonnes alongside increased importation of construction materials. Iron and steel imports surged by 137% to 526,606.4 metric tonnes.
The transportation and storage sector expanded by 5.4% compared to a 3.4% growth in the second quarter of 2024, mainly driven by increased activity in land transport, railway transport, and port throughput. Light diesel usage increased by 12% to stand at 580.8 thousand metric tonnes, while Mombasa port throughput increased by 4.0% to 10.7 million metric tonnes. Passengers transported by the Standard Gauge Railway (SGR) rose by 10.3% to 658.6 thousand passengers, while the volume of cargo transported through the SGR increased by 8.7% to 1.9 million metric tonnes.
The financial and insurance sector expanded by 6.6%, though lower than the 8.0% recorded in a similar period last year.
GDP and Macroeconomic indicators
In the period under review, average inflation stood at 3.89%, lower than 4.87% in the corresponding quarter of the previous year and slightly higher than 3.5% recorded in the first quarter of 2025. The ease in average inflation is attributed to lower prices of non-alcoholic beverages and food.
The Kenyan shilling strengthened against the US dollar, exchanging at an average of KES 129.35 per dollar. The Central Bank cut its policy rate by 25 bps from 10.00% in April to 9.75% in June to stimulate lending to the private sector. Consequently, the cost of lending eased, with commercial banks’ average lending rate standing at 15.29% in June compared to 16.85% in the corresponding month last year.
During the second quarter of 2025, the Nairobi Securities Exchange (NSE) recorded a robust performance. The volume of shares traded soared by 107.9% to 580 million in June 2025, compared to 279 million shares traded in June 2024. Similarly, the NSE-20 index advanced 47.3% to 2,440.3 points compared to 1,656.5 points in June 2024.
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