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International Monetary Fund has downgraded growth forecasts for Sub-Saharan Africa, warning of rising pressure on economies like Kenya. The update follows recent fuel price increases that signal mounting strain on households and businesses.
The IMF said regional growth reached 4.5 per cent in 2025, the fastest pace in a decade. It now projects growth will slow to 4.3 per cent in 2026 due to global shocks.
The lender linked the downgrade to the ongoing Middle East conflict. It said the crisis has disrupted trade, increased costs, and weakened economic stability across several regions.
Kenya faces higher risk as an oil-importing country with limited resource buffers. The IMF warned that such economies will experience worsening trade balances and rising living costs.
Inflation is expected to rise to about 5.0 per cent by December 2026. This increase will strain households already recovering from losses during the COVID-19 period.
The report highlights sharp increases in oil, gas, and fertiliser prices. It also notes higher shipping costs and disrupted supply chains affecting trade with Gulf partners.
Tourism may also suffer due to reduced travel linked to the conflict. The sector remains a key source of foreign exchange for Kenya’s economy.
Remittances could decline as job markets tighten in Gulf countries. Many Kenyan families rely on these funds for essential expenses like education and healthcare.
The IMF warned that rising food prices could worsen food insecurity across the region. A 20 per cent increase could push over 20 million people into crisis conditions.
The lender urged governments to act quickly and protect vulnerable populations. It recommended targeted support measures and sustained investment in social and development programs.
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