Kenya economy to grow by 3 p.c., says IMF

Kenya’s economy is projected to achieve a three per cent growth as the country and its African peers bounce back from effects of the global financial crisis.

The outlook by the International Monetary Fund is based on the recovery of tourism and stabilising of local commodity prices.

Increased private sector inflows and the current constitutional review process are also to play a key role in realising this figure.

“Kenya should be able to pick up well with domestic policies and improved political environment in place from last year’s growth,” said the IMF team during a briefing to journalists on Sunday.

Last year, the economy managed about two per cent growth from a previous 1.7 per cent recorded in 2008.

The last two years went down as turbulent to the Kenyan economy due to the twin effects of the post-election violence and the global credit crisis.

Social spending

As the world economies were crumpling from the effects of the financial downturn, a number of African countries put in measures to shield them from going with the tide.

“We saw African countries increase their social spending in areas like health and education during the year,” said Ms Antoinette Sayeh, director African department of the IMF.

However, there was a near two-decade first time decline in the per capita income in sub-Saharan Africa during the crisis. This resulted to a marginal growth estimated at a maximum of two per cent for the continent in 2009.

But the need to be back on the recovery path for Africa will be guided by previous policies put into practice.

This is expected to result into a 4.5 per cent economic growth for Africa this year.

“We are seeing African economies recovering faster than expected in comparison to the rest of the world. This is good news and means that they should not slow down in ensuring that good monetary practices are put in place,” said Mr Dominique Straus Kahn, IMF managing director.

In Kenya, the tourism sector is already poised to bounce back to stable performance as inflation remains in check.

A state stimulus package targeting areas of infrastructure, health, agriculture and education are also aimed at jump-starting economic growth.