Kenya Outpaces Ethiopia in 2025 Outlook
Ethiofact – Kenya is pulling ahead of Ethiopia in the latest economic projections from the International Monetary Fund (IMF), with analysts pointing to stronger macroeconomic stability and investor confidence as key factors.
Growth Trends: While Ethiopia shows higher numerical growth figures in constant GDP terms, its projections dip in 2025, indicating slowing momentum. Kenya, by contrast, maintains a steady growth pace with more predictable year-over-year increases.
Economic Size: Kenya’s nominal GDP is expected to rise from $108.7 billion in 2023 to $131.7 billion by 2025. Ethiopia, however, is forecast to shrink in dollar terms, from $159.8 billion in 2023 down to $117.5 billion. The reversal reflects pressures from currency devaluation and external imbalances.
Inflation Battle: Ethiopia is grappling with high inflation, exceeding 30,000 units (relative to the data scale), while Kenya’s inflation is on a sharp decline—from 7,675 in 2023 to 4,063 in 2025. This positions Kenya as a more stable environment for business and consumers alike.
The Bottom Line: Kenya’s combination of low inflation, rising GDP in USD, and steady growth is setting it apart as a regional economic leader. Ethiopia, despite its rapid growth rates, faces challenges in currency stability and inflation control.
Analysts suggest Kenya’s ongoing policy consistency and macroeconomic reforms are creating the groundwork for a more resilient and investor-friendly economy in East Africa.