KENYA · ECONOMY
Key Facts
- —The country Kenya is a major East African economy and a tea, coffee and tourism exporter whose official growth figures come from the Kenya National Bureau of Statistics.
- —Why it matters Growth held above 5% while oil prices were far higher than a year earlier, which bears on investors in Kenyan debt, the shilling and East African trade.
- —Why now The statistics bureau published its second-quarter 2026 national accounts on Friday 16 October 2026, three months after the first-quarter report.
- —What happened Kenya’s economy grew 5.1% in the quarter to June, up from 4.9% in the same quarter of 2025 but below the 5.3% of the first quarter.
- —The numbers Transport and storage grew 4.4%, accommodation and food 7.4% and agriculture 3.5%, while average crude oil rose to US$104.45 a barrel from US$67.44.
- —What it means for you US investors in Kenya, travellers and importers of Kenyan tea and coffee see an economy absorbing an energy shock, with living costs still rising.
- —Still open Whether the second half of 2026 holds near 5%, and how far dearer fuel and weaker rains reach food prices and household budgets.
Kenya GDP growth came in at 5.1% in the second quarter of 2026, the Kenya National Bureau of Statistics said on Friday 16 October 2026. The result matters to US investors holding Kenyan debt or shilling assets, because oil prices jumped during the period.
Average crude oil cost US$104.45 a barrel in the quarter, against US$67.44 a year earlier, and the bureau also pointed to an early end to the long rains. Even so, the economy grew faster than the 4.9% recorded in the second quarter of 2025.
We covered the run-up in Kenya’s GDP Growth Faces a 5 Percent Test. That piece set the first-quarter pace of 5.3% as the benchmark, and the new figure lands slightly below it.
What the Kenya GDP Growth Figure Shows
The bureau put real growth at 5.1% for April to June 2026, compared with 4.9% in the same period of 2025. Business Daily, the Nairobi business paper, said the economy “shrugged off” the Iran war and below-average rainfall.
The first-quarter figure was 5.3%, published by the same bureau on Friday 10 July 2026, so the pace eased by 0.2 points. The latest reading is also higher than the 4.9% a year earlier, so growth is slower than the previous quarter but faster than last year.
The bureau described the quarter as marked by disruption and uncertainty in global energy markets and by the early end of the long rains. Capital FM, a Nairobi broadcaster, reported the same headline figure and the same oil price comparison.
Business Daily put average consumer inflation in the quarter at 6.23%, up from 3.89% a year earlier, driven by food and transport prices. The Central Bank of Kenya kept its policy rate at 8.75% on 7 October 2026, according to its website.
Transport, Services and Power Led the Quarter
Transportation and storage grew 4.4%, up from 3.3% a year earlier, helped by more activity in land, rail and water transport. Accommodation and food services grew 7.4%, although that is slower than the 12.8% recorded in the second quarter of 2025.
Electricity and water supply grew 7.7%, information and communication 7.2% and financial and insurance activities 6.1%. Construction grew 6.0%, down from 7.3% a year earlier, even as production of galvanised sheets rose 19.7% to 92,424 tonnes.
Business Today, a Kenyan business outlet that quotes the bureau’s report directly, said wind power generation rose 13.5% to 469.8 million kWh. Thermal generation fell 16.3% to 288.4 million kWh, and total electricity sales rose 15.0%.
Manufacturing grew 2.2%, up from 1.3% a year earlier, according to Business Daily. That is a modest gain, but it shows factory output improving despite dearer fuel.
Weak Rains Slowed Agriculture
Agriculture, forestry and fishing grew 3.5%, down from 4.0% a year earlier, as the March to May long rains ended early in May. The bureau said the early end cut expected crop production at a critical stage of crop development.
Agriculture is Kenya’s largest employer, and Business Daily said it accounts for more than a fifth of GDP. A weaker farm sector matters because food makes up about a third of the consumer price basket, the paper added.
Some crops still did well. Tea output rose 11.1% to 162,600 tonnes from 146,300 tonnes, and coffee exports rose 10.0% to 22,046.4 tonnes.
Vegetable exports rose to 16,025.9 tonnes from 13,326.8 tonnes, and cut flower exports edged up to 33,105.8 tonnes from 32,953.9 tonnes. Fruit exports fell 5.8% to 76,084 tonnes, and milk taken in by processors fell 3.1% to 263.6 million litres, according to Business Today.
Oil Prices Hit Fuel Costs
The bureau put the average crude oil price at US$104.45 a barrel in the quarter, up from US$67.44 a year earlier. Business Daily dated the Iran war to US and Israeli strikes on Iran from 28 February, and linked it to the energy-price shock.
The average retail price of light diesel rose 32% to Sh217.8 a litre (about US$1.68) from Sh165.1 (about US$1.27) a year earlier, Business Daily said. Conversions use the Central Bank of Kenya’s rate of Sh129.81 to US$1, posted on 15 October 2026.
Higher fuel prices feed into transport and distribution costs, Business Daily noted, and weaker farm output adds pressure on food supplies. That squeezes household buying power and raises operating costs for firms, even while output grows.
Our earlier report Kenya Lawmakers Vote to Keep Fuel Tax at 8% covers one policy lever on fuel prices. The new national accounts show why that debate matters for households.
What It Means for You
For US investors, a 5.1% quarter suggests Kenya’s economy kept growing through an energy shock, which is a point in favour of Kenyan debt and shilling assets. The slower pace than the first quarter, and average inflation above 6%, keep the picture from being one-sided.
Travellers will see tourism-related services still growing, with accommodation and food up 7.4%, although more slowly than last year. Kenyan tea output and coffee exports both rose in the quarter, which is a measure of volume and not of price.
Our guides Who Runs Kenya’s Economy, the Key Players in 2026 and Kenya Economy Estimate Hits US$151 Billion give the wider picture. Our overview Kenya in 2026: Political Issues, Economy and the 2027 Vote covers the politics behind the economy.
What Is Not Known
The bureau’s own Second Quarter 2026 report could not be opened from our systems, because its website did not load. The figures rest on Business Daily, Capital FM and Business Today, which quote the report and agree on the headline numbers.
The outlets differ on cement, with Business Daily giving an 11.1% rise to 2.69 million tonnes and Business Today a 10.5% rise to 2.73 million tonnes. We have not used either figure beyond this note.
It is not known whether the second half of 2026 will hold near 5%, or how far the energy shock and weak rains will reach food prices. It is also not known whether the bureau will revise the quarter in later releases.
Frequently Asked Questions
What was Kenya’s GDP growth in the second quarter of 2026?
The Kenya National Bureau of Statistics said the economy grew 5.1% in the second quarter, up from 4.9% a year earlier. The first quarter had grown 5.3%.
Which sectors drove Kenya GDP growth?
Transport and storage grew 4.4%, accommodation and food services 7.4%, and electricity and water supply 7.7%. Information, finance and construction also grew between 6.0% and 7.2%.
How did higher oil prices affect Kenya?
Average crude oil rose to US$104.45 a barrel from US$67.44, and Business Daily said retail diesel rose 32%. The economy still grew, but living costs and transport costs rose.
Why did agriculture grow more slowly?
Agriculture grew 3.5%, down from 4.0%, after the March to May long rains ended early in May. Tea and coffee output still rose.
What does the result mean for US readers?
It shows Kenya’s economy absorbing an energy shock, which matters to holders of Kenyan debt and to travellers. Inflation and weaker farm output remain risks.
Sources: Business Daily, 16 October 2026; Capital FM, 16 October 2026; Business Today, 17 October 2026; Kenyans.co.ke, 10 July 2026; Central Bank of Kenya; Kenya National Bureau of Statistics.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief