Fiscal vulnerabilities now Kenya’s biggest economic risk, World Bank warns
NAIROBI, Kenya, Nov 25 - Kenya’s widening fiscal vulnerabilities have become the most urgent threat to the country’s economic outlook, the World Kenya breaking news | Kenya news today |..
✨ Key Highlights
The World Bank has issued a stern warning that Kenya's expanding fiscal vulnerabilities now represent the most significant threat to the country's economic outlook. This is primarily attributed to persistent budget imbalances, stalled revenue reforms, and high recurrent spending, outweighing other domestic and external risks.
- The World Bank's latest Kenya Economic Update highlights "missed consolidation targets and high recurrent expenditures" as critical vulnerabilities.
- The report emphasizes that "without more ambitious reforms, fiscal and debt vulnerabilities are likely to persist" for Kenya.
- Other significant risks include falling real wages, weak job creation, political instability, climate risks such as droughts and floods, and global uncertainties.
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World Bank Issues Kenyan Economic Updates as Local Banks Report Financials - November 2025
The World Bank has raised Kenya’s 2025 economic growth forecast to 4.9 percent, citing low inflation, easing monetary policy, and improved credit growth. This positive outlook was detailed in its semi-annual Kenya Economic Update report. However, the World Bank also issued a warning that Kenya's expanding fiscal vulnerabilities, attributed to persistent budget imbalances and high recurrent spending, represent the most significant threat to the country's economic outlook. In the financial sector, Family Bank reported a 56 percent rise in its profit after tax to Sh3.5 billion in the nine months to September 2025, a performance driven by higher interest income. Separately, Paramount Bank successfully met the Central Bank of Kenya's (CBK) minimum core capital requirement of Sh3 billion ahead of the December 2025 deadline.
