Kenya's Economy Compared to Tanzania in 2025, Nairobi Beats Dodoma

• The International Monetary Fund (IMF) ranks Kenya as a middle-income country, while Tanzania is considered a low-income country
• In 2025, the Bretton Woods institution projects Kenya's economy would expand by 4.8%, while Tanzania's would grow by 6%
• Kenya's GDP is expected to soar to $132 billion (KSh 17 trillion) this year, while that of Tanzania would reach $85.98 billion (KSh 11.12 trillion)

TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial, business, and technology reporting and offers profound insights into Kenyan and global economic trends.

The International Monetary Fund (IMF) has projected that Kenya's economy will grow by 4.8% in 2025, a slight decline from the previously predicted 5%.

Despite concerns over the United States (US) president Donald Trump's tariffs, the global financial institution stated in its World Economic Outlook report that inflation is expected to remain steady.

The average inflation rate was revised to 4.1%, down from 5.1%, signalling it will remain below the National Treasury's 5% target.

The IMF ranks Kenya as a middle-income country, while its neighbour, Tanzania, is considered a low-income country.

What is Kenya's GDP?

Based on the most recent estimates from the IMF, Kenya is expected to surpass Ethiopia, a regional rival, and become the largest economy in the East African region in 2025.

Kenya is poised to overtake Ethiopia's predicted GDP of $117 billion (KSh 15.14 trillion) with a Gross Domestic Product (GDP) of $132 billion (KSh 17 trillion).

This is attributed to differing macroeconomic circumstances and policy decisions in both nations, as the decision by Ethiopia to devalue its currency led to a surge in inflation and high import costs.

On the other hand, Kenya's macroeconomic resilience has been comparatively strong, with agriculture contributing 22% of GDP as reported by the 2025 Economic Survey.

The Kenyan shilling was ranked the best-performing currency in the world in 2024 after it appreciated by 21% against the US dollar, Bloomberg reported.

On Tuesday, May 27, the Central Bank of Kenya quoted the shilling at 129.23 against the US dollar and 20.89 against the Tanzanian shilling.

Strong increase in industry and agricultural exports, record-high diaspora remittances of $4.94 billion (KSh 638.9 billion), and a successful $1.5 billion (KSh 194 billion) Eurobond sale all contributed to the spike.

The African Development Bank (AfDB) projects Kenya's economy will grow by 5.6% in 2025

What's Tanzania's GDP?

The IMF expects Tanzania's GDP to expand by 6% in 2025 to reach $85.98 billion (KSh 11.12 trillion).

This means Tanzania's economy would lag behind Kenya by KSh 5.88 trillion.

According to AfDB, tourism, manufacturing, and agriculture will be the main drivers of Tanzania's economy, which will also be bolstered by government reforms and investments to enhance the business climate.

The country's inflation is expected to drop to 3.4% in 2025.

Why Tanzanians and Kenyans are engaged in an online war

A minor diplomatic dispute between Tanzania and Kenya was triggered by the recent arrest and deportation of Kenyan activists, as previously reported by TUKO.co.ke.

One country has often viewed the other as inferior due to the stability and advancement of different industries.

Tanzanian president Samia Suluhu claimed she would do everything in her power to defend the nation's sovereignty, which sparked the most recent internet dispute.

Proofreading by Asher Omondi, copy editor at TUKO.co.ke.

Source: TUKO.co.ke