KENYA’S ECONOMIC OUTLOOK FOR 2019


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    Written by: Meshack Masibo
    The World’s leading banks, consultancies and think-tanks see the Kenyan economy expanding by 5.8 percent this year, unchanged from 2018’s estimated growth, sustained largely by increased private sector investments and consumption. Heavy rains in the second quarter of 2018 and the March 9 truce between President Uhuru Kenyatta and opposition chief Raila Odinga – popularly known as the hand shake – likely lifted growth from a five-year low, economists have said.
    The economy last year recovered from 2017’s twin shocks of biting drought in the first half of last year, which hit farming activities hardest, and elevated political uncertainties following a bruising presidential contest that put on hold many investment decisions.
    Kenya posted a solid growth of 6.3 percent in the April-June period of 2018 largely buoyed by good rains earlier in the year.
    But expansion is estimated to have slowed in the third quarter (July-September) due to uncertainty among investors as a result of new taxation measures, before recovering again in the final quarter.
    The consensus growth outlook from the 14 firms is, however, lower than Treasury, International Monetary Fund and World Bank Group’s projections of 6.2, 6.1 and 6.2 percent, respectively.
    “However, the prevalence of the interest rate cap will likely continue to limit the availability of credit and could hinder the government’s ability to secure additional funding from the IMF. This, coupled with fiscal tightening measures, pose headwinds to the outlook,” FocusEconomics analysts said in the report.
    Another risk to economic growth is increased expenditure on debt repayments which eats into development budget.
    Treasury data shows nearly Sh254.17 billion was spend on servicing debt in five months through November, nearly three times the Sh88.35 billion channeled into development projects overseen by……Subscribe to Readmore………

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