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Economy

Kenya and World Bank diverge further on 2019 economic outlook

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Growth is expected to be 5.9 per cent in 2020 and it will accelerate to six per cent in 2021, driven by a recovery in farming and supported by private consumption, a pick-up in industrial activity and still strong performance in the services sector.

Wednesday 10, April 2019

(Bloomberg) --The World Bank has trimmed its outlook for economic growth in Kenya this year, diverging further from what the government forecasts.

The Washington-based lender said that East Africa’s biggest economy will probably expand 5.7 per cent this year, compared with its previous estimate of 5.8 per cent and the government’s forecast of 6.3 per cent, which would be the fastest rate of expansion since 2010.

Higher government spending will likely boost growth, President Uhuru Kenyatta said last week in his state-of-the-nation address. More than a million people in a dozen Kenyan counties are in urgent need of food assistance after below-average rainfall curbed farm output, the nation’s drought-management agency said in March.

“The projections assume that the grain-growing regions of Kenya will receive normal rains, albeit with some delays in 2019 before normalising over the medium term,’’ the World Bank said.

“If the March-May 2019 long rains disappoint, especially for the grain-growing regions, then this could result into further downward revision of growth for 2019 by at least 0.6 percentage point,” added the lender.

Agriculture is the biggest contributor to the economy, accounting for about half of GDP.

The World Bank said that Kenya’s economy probably expanded about 5.8 per cent last year.

 

TAGS : World Bank, Kenya economic growth, Outlook, President Uhuru Kenyatta

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