Kenya's economy is believed to be 25% larger than previously estimated following a change in the way its size is calculated.
The recalculation means it will now be considered by economists and the World Bank as a middle-income country, rather than a low-income one.
As a result growth for 2013 was calculated to have been 5.7%, up from an earlier estimate of 4.7%.
It is now the fourth biggest economy in sub-Saharan African.
Nigeria, South Africa and Angola are the three biggest economies in the region.
Economic output was calculated to be 4.76 trillion shillings ($53.1bn; £32.8bn) in 2013 after rebasing, up from 3.8 trillion shillings, the minister for devolution and planning, Anne Waiguru, said on Tuesday.
Some of the most profitable sectors in Kenya - communications and property - were not considered in earlier calculations of GDP which used 2001 as a base year.
Authorities in the East African country have now changed the base calculation year to 2009 and revised the annual and quarterly national accounts statistics for the period 2006 to 2013.
Standard Chartered Bank Africa economist Razia Khan said the recalculation confirmed "what we had previously suspected".
"The economy has demonstrated good momentum and has been growing faster than the official data indicated all along. It fits with much of the anecdotal evidence available to us - still-robust business confidence and healthy private sector credit growth."
Ms Khan said the rebasing lifted the average per capita income in Kenya to $1,246 "effectively meaning that the country moves to lower middle income status".
According to the World Bank middle economies are those with a GDP per capita of more than $1,045 but less than $12,746.
While the recalculation is expected to lower debt levels and increase foreign investor confidence, analysts said the figure will change little for much of the population.
Poverty levels in the country remain at 45.9%, and life expectancy is at 61 years, as estimated by a 2013 World Bank report.
Several African countries have recently been reworking their economy figures, a trend which the Africa Development bank has said will show the continent's economies collectively being one third bigger than previously thought.
Earlier this year Nigeria vaulted ahead of South Africa to clinch the number one position after it conducted a similar rebasing of its economy, placing the country's GDP at $522.6bn.