NCBA Bank projects Kenya’s economic growth to slow to 4.5% in 2027.

Kenya's economic growth is projected to slow to 4.5 per cent in 2027 from an estimated 4.8 per cent in 2026, as global uncertainty, weaker industrial activity and subdued growth across key markets weigh on the country's economic outlook.

In its November 2026 Macroeconomic Outlook report presented during the 11th NCBA Economic Forum, NCBA Group said the economy would remain resilient but face a difficult operating environment next year.

The bank attributed the projected slowdown to persistent global uncertainty, warning that economic growth across its key markets was likely to remain soft throughout 2027.

The report indicated that the World Uncertainty Index in 2026 had risen to 4.3 times its 2024 level, reflecting heightened uncertainty in the global economic environment.

"Following persistent uncertainty, economic growth in our key markets will likely remain soft in 2027," the report stated.

NCBA projected global economic growth at 3.4 per cent in 2027, up from 3.1 per cent in 2026, while the United States economy is expected to expand by 2.3 per cent, unchanged from the previous two years.

Growth in the Euro Area is forecast to improve slightly to 1.2 per cent in 2027 from 1.1 per cent in 2026.

Sub-Saharan Africa is expected to maintain growth of 4.5 per cent between 2025 and 2027, highlighting the region's relatively steady economic performance despite international uncertainties.

In East Africa, the bank projected Uganda's economy to grow by 7 per cent in 2027, while Tanzania and Rwanda are also expected to record growth of 6 per cent and 7 per cent, respectively.

NCBA said Kenya had demonstrated resilience during 2026, supported by steady growth momentum, regular government expenditure, interest rates remaining within range and favourable domestic liquidity conditions.

The bank also identified improved foreign exchange market liquidity and access to commercial external markets as factors supporting the economy.

However, it warned that maintaining this performance would become more challenging in 2027.

According to the projections, Kenya's real GDP growth will decline from 4.8 per cent in 2026 to 4.5 per cent in 2027.

The slowdown is expected to affect key sectors differently, with agriculture projected to record improved growth while industry and services experience reduced expansion.

Agricultural growth is forecast to increase to 4.4 per cent in 2027 from 3 per cent in 2026.

Industry is expected to slow to 4.8 per cent from 5.2 per cent, while the services sector is projected to expand by 4.5 per cent, down from 5.3 per cent.

The projections suggest that agriculture will provide additional support to economic activity as growth in other sectors moderates.

The report also outlined expectations for inflation, private sector credit growth, interest rates and the exchange rate throughout 2027.

NCBA forecasts headline inflation at 7.5 per cent in March 2027 before easing to 6.8 per cent in June and September, and further declining to 6.5 per cent by December.

The Central Bank Rate (CBR) is projected to remain unchanged at 8.75 per cent throughout the year.

Meanwhile, private sector credit growth is expected to begin at 10 per cent in March before slowing to 7 per cent in June and September, then recovering to 12 per cent in December.

On the foreign exchange market, the bank expects the shilling to trade at an average of 130 against the US dollar in March 2027 before weakening to 131 in June, September and December.

The projections indicate that Kenya's economic environment will continue to face pressure from global developments, even as domestic economic conditions provide some support.

NCBA's outlook places particular emphasis on the need to monitor international uncertainty, regional economic performance and domestic sectoral trends as businesses and policymakers prepare for 2027.