Citi research managing director and Africa economist David Cowan on February 13, 2018. PHOTO | DIANA NGILA | NMG
Citibank said on Tuesday its 5.6 per cent economic growth
forecast for Kenya in 2018 is largely pegged on expectations of recovery
in the services and manufacturing sectors.
The bank’s growth outlook is higher than a consensus forecast of about 5.3 per cent by about 17 local and global firms.
Elevated
political tension as a result of prolonged presidential polls pushed
economic growth to a five-year low estimated at 4.8 per cent in 2017,
Citibank’s chief economist for Africa David Cowan said.
“We
think the ongoing recovery in tourism sector will persist with direct
flights to the US, we should see a bit of pick up in manufacturing,
construction is set to stabilise going forward and financial services
will also recover a bit,” Mr Cowan told an investors’ breakfast
organised by American Chamber of Commerce Kenya in Nairobi today.
“We have seen business confidence return after the elections and that’s important.”
Concerns
around recovery of farming activities, which accounts for about a
quarter of gross domestic product, remains the biggest downside risk to
Citibank’s growth outlook for Kenya, he said.
Environment
and Forestry Principal Secretary, Charles Sunkuli, warned of a
possibility of La Nina, a condition of unusually cold ocean temperatures
linked to prolonged dry spell in East Africa this year.
Other projections
A
monthly consensus forecast by FocusEconomics – a Barcelona-based
economic analysis firm which tracks growth projection from 11 global
leading banks, consultancies and think-tanks – last month put Kenya’s
growth outlook at 5.3 per cent.
The World Bank Group
and the International Monetary Fund (IMF) have projected a growth of 5.5
per cent for Kenya this year, while African Development Bank (AfDB) has
forecast economic expansion at a rate of 5.6 per cent.
Treasury
secretary Henry Rotich has projected a growth of between 5.5 and six
per cent, while Central Bank of Kenya governor Patrick Njoroge has been
the most bullish in his forecast at 6.2 per cent.
StanChart is the only firm that has so far projected a growth of below five per cent among 17 domestic and international firms which have so far released their outlook reports on Kenya.
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