Kenya’s economy is expected to grow 5.5 per cent this year compared with an estimated 4.8 per cent last year, according by a statement by the world bank. The expected improvement is largely due to better weather and less political risk after last year’s presidential election.
A severe drought in the first quarter, political turmoil due to a disputed and then re-run presidential election and sluggish private sector credit growth all helped cut 2017 economic output growth to the lowest in five years, from 5.8 percent the previous year, according to Reuters.
Although growth is expected to rebound to 5.8 percent, there is pressure on the Government to curb the country’s fiscal deficit, which could cause it to scale back ambitious infrastructure projects, weighing economic output. In its latest report on the Kenyan economy, the World Bank said that the dissipation of political uncertainty and the recovery in the global economy is supporting a rebound in business sentiment, Reuters reported.
Good rainfall over the last month in the country’s crop growing areas have boosting expectations of improved harvests; farming is the biggest sector.
However, the World Bank said it was likely that higher oil prices combined with reduced government investment in infrastructure and still-weak credit growth could curb some of the optimism.