Kevin85ify
JF-Expert Member
- Apr 6, 2019
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Kenya’s economic performance strengthened in 2023 with the GDP accelerating to about 5.4 per cent from 4.8 per cent in 2022.
This is according to the latest edition of Kenya Economic Update by World Bank, which says the growth is despite the tough macro economic environment experienced this year.
It attributes the growth to a strong rebound in agriculture sector which had faced a persistent and severe drought, as well as a moderate growth in the services sector.
"The recovery of agriculture has led to improvements in food supply and coupled with monetary policy tightening has helped reduce inflationary pressures," the lender says.
"Tourism continued to expand, credit to the private sector improved and manufacturing activity is expected to improve from the anticipated growth in agro-processing sector."
World Bank however cautions that the still faces several challenges to sustain its growth momentum.
These include heightened fiscal and external vulnerabilities manifested through high public debt, elevated cost of living, exchange rate pressures, global economic uncertainties and tight global financial conditions.
World Bank country director for Kenya Keith Hansen commended the government’s strategy to tap into concessional borrowing to ease debt pressure, saying it prudently helps reduce the accumulation of expensive debt.
According to the report, debt related vulnerabilities persist, and rising debt costs constrain government’s ability to address development challenges.
"The country is however making progress and has reduced the primary deficit from 1.6 per cent of GDP in FY2021/22 to 0.8 per cent of GDP in FY2022/23, while the overall deficit decreased from 6.2 to 5.6 per cent during the same period and is expected to reduce further to 5.4 per cent in FY2023/24," WB says.
World Bank senior economist and author of the report Naomi Mathenge said Kenya need to balance the short-term challenges of macroeconomic stability with the need to focus on policies for achieving longer-term growth that includes all in society.
The report projects that the real GDP will grow between 4.5–5.2 per cent in 2024.
This will be facilitated by improved investor confidence and credit to the private sector helped by reduced domestic borrowing by the government, the report reads in part.
It however says the outlook is subject to elevated uncertainty because of domestic and external risks.
"Domestically, droughts and floods would resume inflationary pressures and food insecurity, and coupled with the sustained reform momentum would dampen growth while external risks could stem from global credit markets volatility, lower than anticipated growth in the Euro Zone coupled with elevated commodity prices driven by international conflicts."
This is according to the latest edition of Kenya Economic Update by World Bank, which says the growth is despite the tough macro economic environment experienced this year.
It attributes the growth to a strong rebound in agriculture sector which had faced a persistent and severe drought, as well as a moderate growth in the services sector.
"The recovery of agriculture has led to improvements in food supply and coupled with monetary policy tightening has helped reduce inflationary pressures," the lender says.
"Tourism continued to expand, credit to the private sector improved and manufacturing activity is expected to improve from the anticipated growth in agro-processing sector."
World Bank however cautions that the still faces several challenges to sustain its growth momentum.
These include heightened fiscal and external vulnerabilities manifested through high public debt, elevated cost of living, exchange rate pressures, global economic uncertainties and tight global financial conditions.
World Bank country director for Kenya Keith Hansen commended the government’s strategy to tap into concessional borrowing to ease debt pressure, saying it prudently helps reduce the accumulation of expensive debt.
According to the report, debt related vulnerabilities persist, and rising debt costs constrain government’s ability to address development challenges.
"The country is however making progress and has reduced the primary deficit from 1.6 per cent of GDP in FY2021/22 to 0.8 per cent of GDP in FY2022/23, while the overall deficit decreased from 6.2 to 5.6 per cent during the same period and is expected to reduce further to 5.4 per cent in FY2023/24," WB says.
World Bank senior economist and author of the report Naomi Mathenge said Kenya need to balance the short-term challenges of macroeconomic stability with the need to focus on policies for achieving longer-term growth that includes all in society.
The report projects that the real GDP will grow between 4.5–5.2 per cent in 2024.
This will be facilitated by improved investor confidence and credit to the private sector helped by reduced domestic borrowing by the government, the report reads in part.
It however says the outlook is subject to elevated uncertainty because of domestic and external risks.
"Domestically, droughts and floods would resume inflationary pressures and food insecurity, and coupled with the sustained reform momentum would dampen growth while external risks could stem from global credit markets volatility, lower than anticipated growth in the Euro Zone coupled with elevated commodity prices driven by international conflicts."
