Kenya has reclaimed regional economic supremacy after five years behind Ethiopia, with its GDP rising to $135.92 billion against Ethiopia’s $126.35 billion.
Kenya has overtaken Ethiopia to become East Africa’s largest economy, ending Addis Ababa’s five-year reign after a sharp currency devaluation pushed the dollar value of its economy below Nairobi’s.
Kenya’s gross domestic product (GDP) rose to $135.92 billion in 2025, up from $119.36 billion in 2024, while Ethiopia’s fell from $210 billion to $126.35 billion, according to figures cited in the International Monetary Fund’s latest economic outlook.
The shift propelled Kenya to seventh place among Africa’s largest economies, with Ethiopia slipping to eighth.
The reversal, however, reflects exchange-rate movements rather than a collapse in Ethiopia’s economic output.
Ethiopia’s currency, the birr, was devalued in July 2024 as part of economic reforms linked to financing from international lenders, significantly reducing the dollar value of its economy.
In real terms, Ethiopia’s economy grew by 9.2 per cent in 2025, more than twice Kenya’s 4.6 per cent growth, highlighting the difference between economic expansion and GDP measured in US dollars.
Kenya’s return to the top spot revives a longstanding regional rivalry spanning trade, manufacturing, investment and aviation.
Nairobi is positioning itself as an East African commercial hub, while Addis Ababa has built its regional influence around Ethiopian Airlines and Ethiopia’s expanding economy.
The IMF projections cited in the report indicate that Kenya could further strengthen its continental ranking by overtaking Angola to become Africa’s sixth-largest economy by 2028.
