Kenya has become the region’s largest economy, according to the International Monetary Fund, which estimates that Kenya’s nominal GDP grew about 13.7 % in 2025, while Ethiopia’s dollar‑valued GDP contracted sharply from its 2024 level. This shift marks a pivotal re‑ranking in East Africa’s economic hierarchy and signals Kenya’s growing attraction for investment and trade, while Ethiopia faces tightening fiscal pressures. Watching the IMF’s next quarterly outlook, Ethiopia’s recovery policies, and how Kenya leverages its newfound status for infrastructure and regional integration will be crucial for the region’s future growth trajectory. [[1]]
