Skip to content
Market News

NCBA Projects 4.8% GDP Growth in 2024, Highlights Key Trends For 2025

BY Soko Directory Team · November 6, 2024 11:11 am

KEY POINTS

NCBA Economic Forum was officially launched in January 2018 with the aim of bringing together the government and industry stakeholders for candid conversations meant to spark economic growth.

NCBA has forecasted a steady growth in the country’s GDP with output projected to close at 4.8% in 2024 and remain consistent into 2025. In an economic forum held today, under the theme,“Navigating Uncertainty – Key Trends Influencing the Economic and Business Environment in 2025,” the bank addressed the global and domestic factors influencing Kenya’s economy, including inflation trends, fiscal policy, and sector performance.

Speaking on the projected trajectory, NCBA Group Managing Director, John Gachora noted that in the previous year, the country was in the throes of a financial crisis brought about by a potential sovereign debt default with the maturity of the June 2024 Eurobond. A raging currency crisis further exacerbated those concerns and an unprecedented tight external environment that locked Kenya out of  international capital markets.

“Kenya acted decisively to resolve its exceptional financing needs for the June 2024 Eurobond maturity, well ahead of schedule, which significantly eased sovereign spreads,” Gachora noted. “Since then, the currency crisis has receded, bringing a welcome stability across Kenya’s financial markets. 

Read Also: NCBA Takes Over 100 Business Customers To China

Key Highlights:

  1. i) Global Economic Conditions:
  • Inflation: Lower inflation rates globally are improving the external environment.
  • Global GDP Projections: The IMF projects global growth of 3.1% in 2024, expected to rise to 3.3% in 2025.
  • Global PMI: The global composite PMI has remained above 50 this year, signaling steady economic activity worldwide.
  1. ii) Domestic Economic Insights:
  • Agriculture and Agro-Processing: Favorable weather continues to boost agricultural exports, positively impacting food inflation.
  • The service sector is expected to maintain resilience, with most sub-sectors projected to grow at near long-term average rates.

iii) Fiscal Challenges:

  • Public Debt: Debt interest payments will consume 38% of tax revenue in 2024/25, decreasing slightly to 35% in 2025/26. This constraints funds for development, limiting medium- and long-term growth prospects.

  • Tax Burden: Rising and unpredictable tax and statutory deductions challenge cash flow for businesses.

  • Pending Bills: High pending bills, totaling KES 516 billion for the national government and KES 182 billion for counties, restrict liquidity for the private sector, impacting economic stability.

Read Also: NCBA And Sanlam Join Hands To Offer New Life Insurance Products

David Ndii, the Chairperson of the President’s Council of Economic Advisory expressed his optimism for the coming year, highlighting a favorable inflation outlook backed by strong forex reserves, a robust export performance and improved capital flows following a decline in global interest rates.

Looking ahead, he identified affordable housing, domestic energy, electric vehicles, and sustained agricultural productivity as key areas that will drive the economy’s growth.

To support growth, Ndii emphasized the need to raise national investment to 25% of GDP, driven by increased savings, expanded private partnerships, and financial deepening.

This year’s 9th edition of the forum was attended physically and online by over 700 NCBA customers drawn from various sectors including Manufacturing, Agriculture, among others. Key speakers included David Ndii, Chairperson of the President’s Council of Economic Advisors; Mary-Ann Musangi, Chairperson of the Women in Manufacturing Committee, KAM, and the Managing Director of HACO Industries LTD, and Sandeep Main, Partner, Tax and Regulatory Services at KPMG.

NCBA Economic Forum was officially launched in January 2018 with the aim of bringing together the government and industry stakeholders for candid conversations meant to spark economic growth.

Read Also: Building Resilience in Uncertain Times: NCBA Bank Charts Kenya’s Path Forward At The 2024 Economic Forum

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

Trending Stories
Government and Policy Kenya Is Struggling With Debt As Modest Revenue Is Collected With Limited Development Investment Steve Biko Wafula
Entrepreneur's Corner Kenyan Clients Don’t Care Whether You’re In the ICU: The Brutal Truth Of Entrepreneurship Soko Directory Team
Headlines Are The SACCOS The Infinite Money Glitch Of Kenya? Soko Directory Team
Government and Policy Saccos Clamp Down On Struggling Businesses, Recover Sh491 Million In A Ruthless Crackdown Soko Directory Team
Entrepreneur's Corner The Greatest Skill Everyone Should Master Is The Skill Of Knowing How To Manage Money Soko Directory Team
Related Articles
Market News Safaricom’s M-PESA Hits 34 Million Customers In Kenya Soko Directory Team
Market News Savannah Clinker Withdraws Competing Offer For Bamburi Cement Soko Directory Team
Market News November PMI Expands To 50.9, CBK MPC Interest Rate Decision Tomorrow Soko Directory Team
Market News Savannah Clinker Seeks CMA’s Approval For Offer Extension: No Money? Soko Directory Team
Market News Kenyan Shillings Maintains Resilience Against The US Dollar With Slight 0.06% Shedding Soko Directory Team
Explore Soko Directory
Banking Blogging Commodity Watch Did you know Entertainment Entrepreneur's Corner Feature Government and Policy Headlines Investment Lifestyle Market News Money Opinion Press Releases Stock Watch Technology
Soko Directory Archives