Kenyan consumers faced a mixed economic landscape in Q2 2025, with spending reaching record highs largely due to rising prices.
- •At the same time, local markets continued to show strong resilience, outperforming global peers amid persistent international economic uncertainty.
- •According to Q2-2025 ILAM Consumer Spending Index, 85% of consumers reported spending more in Q2 compared to the same period last year.
- •However, this increase is largely attributed to rising prices (inflation) rather than increased consumption.
Income growth was not uniform across the board, with 27% of respondents seeing their incomes rise, while 30% experienced a decline. Eldoret recorded the highest income growth, in contrast to Nyeri and Kisumu, which reported the highest declines. Workers in education, training, and logistics saw better income growth, while those in trade sectors faced significant reductions.
Savings and Credit Cooperative Organizations (SACCOs) continue to be the preferred investment option, followed by banks and chamas. Unit trusts and listed shares lagged in popularity, indicating a preference for perceived lower-risk options, driven by considerations of returns, safety, and practicality.
“Local markets continue to offer better risk-return dynamics in 2025 compared to global markets,” he stated, attributing this to strong equity demand, supportive policy environments, and resilient consumer behavior,” Einstein Kihanda, CEO of ICEA LION Asset Management said.
Esther Muchai, Senior Portfolio Manager at ICEA LION, highlighted that global economic forecasts have been revised downward. In contrast, Kenya’s economy appears stronger, with the Central Bank of Kenya projecting higher GDP growth in 2025.
This optimism is fueled by a recovery in private sector credit, improved export performance, and macroeconomic stability, particularly concerning inflation and currency. The Nairobi Securities Exchange (NSE) has also seen robust performance, driven by increased investor appetite, attractive equity valuations, a stable shilling, and declining fixed-income returns.