NAIROBI, Kenya- The World Bank has warned that millions more Kenyans could slip into poverty over the next two years as rising global energy prices, weaker private investment and slowing economic growth squeeze household incomes.
In its latest Kenya Economic Update, the World Bank projects Kenya’s economy will grow by 4.3 percent in 2026 and 4.4 percent in 2027, down from its previous forecast for 2026. The lender attributed the downgrade to higher global oil prices, increased economic uncertainty and weaker domestic demand.
The report estimates that between one million and 2.4 million additional Kenyans could fall below the international poverty line of $3 (about Sh390) a day if elevated fuel and commodity prices persist, eroding household purchasing power.
According to the World Bank, higher production costs are expected to slow private investment, while moderating remittance inflows and increased commodity prices will further weigh on household spending.
“In the short term, higher global energy prices and increased uncertainty are expected to raise production costs, weaken private investment growth and weigh on household purchasing power through higher commodity prices and moderating remittance inflows,” the report said.
Despite the warning, the lender noted several positive indicators supporting the economy, including strong agricultural output, a stable exchange rate, easing monetary policy and improved access to private sector credit.
The World Bank, however, cautioned that risks remain high, citing possible climate-related shocks and political uncertainty ahead of Kenya’s August 2027 General Election, which could undermine investor confidence and slow economic activity.
The projections differ from those of the National Treasury, which expects the economy to expand by 5.0 percent in 2026 and 5.2 percent in 2027.
Last month, the World Bank approved $1.25 billion in financing for Kenya through a loan and a sustainability-linked facility aimed at supporting fiscal reforms and reducing the country’s reliance on expensive domestic borrowing.