Mbadi highlights economic gains in 2025/26 budget
Treasury Cabinet Secretary John Mbadi has highlighted key economic strides as he presented Kenya’s 2025/2026 budget.
Mbadi pointed to the significant drop in the country’s inflation rate to 3.8 per cent in May 2025, down from a peak of 9.6 per cent recorded in October 2022.
Addressing Parliament on Thursday, June 11, 2025, Mbadi attributed the easing inflation to prudent fiscal management and targeted policy interventions that have helped tame inflationary pressures and restore macroeconomic stability.
“Inflation rates have declined to 3.8 per cent in May 2025 from a peak of 9.6 per cent in October 2022. In response to the decline in inflation, CBK has gradually eased monetary policy, lowering the CBK bank rates from 13 per cent in August 2024 to 9.75 per cent in June 2025.” Mbadi said.
To support this momentum, the Central Bank of Kenya (CBK) has gradually relaxed its monetary stance. The CBK rate has dropped from 13 per cent in August 2024 to 9.75 per cent as of June 2025, a move aimed at spurring private sector investment and easing credit access.
The 2025 budget, themed around rebuilding economic resilience, sets ambitious targets. The government projects to collect Ksh2.7 trillion in ordinary revenue while managing a fiscal deficit of Ksh874.18 billion. Mbadi clarified that the gap would be financed through borrowing but stressed the government’s commitment to responsible debt management.
“Our aim is to finance development while ensuring fiscal sustainability. We are investing in priority sectors such as health, education, and infrastructure to drive inclusive growth,” the CS said.
The budget comes at a critical juncture for Kenya’s economy, which is recovering from past shocks, including the global economic downturn and public unrest over unpopular financial bills. Last year’s protests against the Finance Bill 2024, which saw violent clashes and widespread dissent, have prompted the government to adopt a more measured approach this year.
“Kenya’s economy has demonstrated remarkable resilience despite facing both domestic and external shocks, a performance attributed to sound and deliberate government policies and the country’s diversified economic structure.”
To enhance transparency and credibility, Mbadi also confirmed the Treasury’s shift to zero-based budgeting, where every expense must be justified from scratch. This approach is expected to curb unnecessary spending and align national priorities with current fiscal realities.
As MPs begin deliberations on the proposed estimates, all eyes are on how the budget will balance economic recovery with the rising cost of living. The CS expressed optimism that current indicators point to a more stable economic path ahead.
