By Eddah Waithaka
Absa Bank Kenya PLC brought together customers, industry peers, and financial market stakeholders for a weeklong ‘2025 Economic Forum’, delivering in-depth macroeconomic analysis and exploring innovative financing opportunities.
The forum, held in Nairobi, focused on yield-enhancing strategies and building resilience amid evolving market dynamics.
Speaking during the unveiling, Absa Bank Kenya PLC CEO and Managing Director, Mr. Abdi Mohamed, emphasized the bank’s commitment to Africa’s growth.
“At Absa, we are deeply invested in your story because it truly matters to us. As a collective, we aim to be a financial services group that Africa can be proud of. We are committed to the prosperity of this continent and its people. By sharing these insights, we contribute to the reforms and policy discussions essential for Africa’s progress,” he stated.
The forum provided a platform for bank analysts, financial institutions, importers, exporters, regulators, and investors to dissect complex financial instruments.
Participants explored strategies to navigate market volatility, alternative funding opportunities, and yield-enhancing tools, particularly as Kenya transitions into a low-interest-rate environment.
Key Insights from the Forum
Absa Bank Senior Economist, Phumelele Mbiyo, presented a comprehensive macroeconomic outlook, highlighting critical data points.
GDP Growth
Kenya’s GDP is projected to grow by 4.9% in 2025, driven by a sectoral shift from agriculture to construction and financial services.
Inflation
Inflation is expected to average 4.5% in 2025, with core inflation remaining stable at around 2%. Food price pressures are likely to ease as the effects of a mild La Nina phenomenon subside after the first quarter.
Policy Rate
The Central Bank of Kenya (CBK) is anticipated to reduce the Central Bank Rate to 9% by the third quarter, maintaining it for the rest of the year. This move is expected to lower borrowing costs and stimulate private sector credit growth.
Agriculture’s Declining Contribution
Agriculture’s role in Kenya’s GDP growth has been diminishing over the past year. The sector is expected to face further challenges due to the La Nina weather phenomenon, which may peak in intensity during the first quarter of 2025, impacting food prices.
Construction Sector Recovery
After stagnating post-2022, the construction sector is showing signs of recovery, with activity picking up over recent months.
Financial Services Boost
The financial services sector, previously affected by high interest rates, is rebounding following consistent rate cuts by the CBK since August 2024. Lower borrowing costs are expected to spur private sector credit growth.
Foreign Currency Stability
The Kenyan shilling is projected to remain stable, supported by robust international financial inflows. Kenya’s foreign exchange reserves are near record levels, bolstered by foreign portfolio investments, multilateral loans from the World Bank and IMF, bilateral loans, and Eurobond market access.
These factors have enhanced investor confidence and minimized currency volatility.
The forum underscored Absa Bank Kenya’s role as a thought leader in the financial sector. By fostering dialogue among key stakeholders, the event highlighted actionable strategies to navigate economic challenges and capitalize on emerging opportunities.
Participants left equipped with insights to drive growth, enhance yields, and build resilience in an increasingly dynamic economic landscape. As Kenya continues its economic transformation, forums like these play a pivotal role in shaping policy discussions and fostering innovation.
Absa Bank Kenya remains at the forefront, empowering its clients and stakeholders to thrive in a rapidly changing world.
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