Economy to grow by six per cent this year
Central Bank of Kenya Governor Patrick Njoroge speaks during a media briefing on the Monetary Policy Committee decisions at CBK on May 24, 2016. The economy will grow by 6pc this year. PHOTO | SALATON NJAU | NATION MEDIA GROUP
What you need to know:
- But the report also warned that the government’s deficit remained high in Kenya and had widened in Uganda and Ethiopia.
- The report said that Sub-Saharan Africa growth is expected to pick up modestly to 2.9 per cent in 2017 as the region continues to adjust to lower commodity prices.
The Kenyan economy will grow by six per cent this year and stay steady at 6.1 per cent over the next two years, according to the latest World Bank Global Economic Prospects report released this week.
Kenya’s projected growth rates are above those of Uganda, which will vary between 5.6 and 6.0 per cent over the next three years, but below Tanzania’s at over 7.0 per cent; and considerably below East Africa’s star performer Ethiopia at under nine per cent.
The East Africa region as a whole will continue to see some of the fastest growth rates over the next three years, the report said.
A key factor in Kenya’s success has been currency stability, which has helped keep inflation under control and within the target range of the Central Bank.
This has resulted in lowering interest rates for the economy, the report added.
But the report also warned that the government’s deficit remained high in Kenya and had widened in Uganda and Ethiopia.
Confirming other recent reports such as the Economist Intelligence Unit, the World Bank said large infrastructure development projects continue to support robust growth backed by public-private partnerships.
External funding for infrastructure grew fastest in the energy sector, the report said, with Kenya and Ethiopia among the largest recipients across Sub-Saharan Africa.
For Sub-Saharan Africa as a whole, growth in 2016 slumped to 1.5 per cent, the worst since 1994, due to global economic uncertainty, low commodity prices, weak demand, drought and continuing insecurity.
Capital flows including foreign direct investment also declined sharply as did remittance flows from Africans living abroad.
The report said that Sub-Saharan Africa growth is expected to pick up modestly to 2.9 per cent in 2017 as the region continues to adjust to lower commodity prices.
Growth in South Africa and oil exporters is expected to be weaker, while growth in economies that are not natural-resource intensive, particularly in East Africa “should remain robust”.
Global economic growth is forecast to accelerate moderately to 2.7 per cent in 2017.
Growth in advanced economies is expected to edge up to 1.8 per cent in 2017.
