Refugees in Dadaab fetching water: Fears of a persistent drought have
cut Kenya's economic growth prospects. FILE PHOTO | TONY KARUMBA | NMG
The International Monetary Fund (IMF)
has slashed Kenya's economic growth forecast for this year to 5.3 per
cent amid fears that a persistent drought, sluggish private sector
credit growth and rising prices of oil will slow down the economy.
The
Fund had earlier predicted the country's economic growth rate will slow
in 2017 within the 5-6 per cent range from about 6 per cent last year
as investors take a wait-and-see attitude before the August general
election.
In its latest World Economic Outlook released
Monday, the IMF also announced an upward review of its forecast for
global economic growth in 2017 from 3.1 per cent in 2016 to 3.5 per cent
in 2017 and 3.6 per cent in 2018.
“In sub-Saharan
Africa, a modest recovery is foreseen in 2017. Growth is projected to
rise to 2.6 per cent in 2017 and 3.5 per cent in 2018, largely driven by
specific factors in the largest economies, which faced challenging
macroeconomic conditions in 2016,” said IMF.
Last week, the World Bank forecast Kenya’s GDP growth would decelerate to 5.5 per cent, a 0.5 percentage point mark down from the 2016 forecast over poll jitters and drought.
The
country’s economy expanded by 5.7 per cent in the third quarter of
2016, a slight dip from the 6 per cent recorded in the third quarter of
2015 on the back of stunted growth in agricultural, manufacturing, real
estate and construction sectors.
In February, the
Central Bank of Kenya downgraded economic growth forecast to 5.7 per
cent in 2017 from 5.9 per cent last year, citing uncertainties in the
global economy.
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