Treasury trims economic growth forecast to 5pc on Middle East conflict

The Treasury says that locally climate-related shocks for the agriculture sector could affect economic growth. [File, Standard]

Kenya has cut the country’s economic growth forecast for 2026 to five per cent, citing the Middle East conflict that has driven up oil import costs and destabilised supply chains.

The National Treasury in budget books for the 2026/27 financial year said the impact of the US-ISrael war on Iran as well as retaliatory attacks by Iran on its neighbours hosting US military assets is already evident in Kenya, where pump prices increased by significant margins in April. It warned that a prolonged conflict is expected to further hurt the economy, with different sectors including export of Kenyan commodities as well as the import of raw materials for local industries taking a hit.