Absa Bank Kenya has successfully hosted a weeklong 2025 Macro Economic Outlook, Risk Management, and Structured Investments Solutions Forum, bringing together financial market stakeholders, investors, and corporate clients to discuss economic trends, financing opportunities, and risk management strategies.
The forum provided in-depth macroeconomic analysis, with a special focus on yield-enhancing strategies and alternative funding options, equipping businesses with tools to navigate an evolving financial landscape.
Speaking at the event, Absa Bank Kenya PLC CEO and Managing Director, Mr. Abdi Mohamed, reaffirmed the bank’s commitment to empowering businesses and shaping economic discussions that drive Africa’s prosperity.
“At Absa, we are deeply invested in your story because it truly matters to us. As a collective, we have an ambition to be a financial services group that Africa can be proud of. We are committed to the growth of this continent and the prosperity of our people, and we believe that bringing these kinds of insights is our contribution to the reforms and policy discussions that need to take place in our continent,” said Mr. Mohamed.
The sessions attracted a diverse group of stakeholders, including banking and non-banking financial institutions, importers, exporters, regulators, and market investors, all seeking expert insights on navigating economic volatility and leveraging investment opportunities in a shifting global landscape.
Absa Bank Senior Economist, Phumelele Mbiyo, shared key macroeconomic projections, offering data-driven insights into Kenya’s financial landscape:
GDP Growth: Kenya’s economy is expected to grow at 4.9 percent in 2025, with a notable shift from agriculture to construction and financial services as primary growth drivers.
Inflation: Projected to average 4.5 percent, with core inflation remaining stable at 2 percent since July 2024. Inflationary pressures from food prices are expected to ease after Q1 2025 as the effects of La Niña subside.
Monetary Policy: The Central Bank Rate (CBR) is anticipated to be cut to 9% by Q3 2025, lowering borrowing costs and boosting private sector credit expansion.
Sectoral Trends Shaping Kenya’s Economy
1. Agriculture’s Declining Role: The sector’s contribution to GDP has been falling due to adverse weather conditions, with the weak La Niña phenomenon expected to peak in early 2025, impacting food production and prices.
2. Construction Sector Recovery: After stagnating post-2022, the construction industry is showing strong signs of revival, contributing positively to economic growth.
3. Financial Services Rebound: The sector, which slowed after the CBK’s interest rate hikes, is expected to recover as monetary policy shifts towards lower borrowing costs, spurring credit expansion.
4. Stable Foreign Exchange Outlook: The Kenya Shilling is expected to remain stable, supported by strong foreign exchange reserves and inflows from multilateral institutions, bilateral loans, Eurobonds, and foreign investments in the local bond market.
The Absa Economic Forum emphasized the importance of alternative financing models, structured investments, and risk mitigation strategies to help businesses and investors adapt to a changing economic landscape.