By Kepha Muiruri For Citizen Digital
In a statement sent out after MPC meeting, the reserve bank has acknowledged the gathering dark clouds of uncertainty but says the economy remains well placed to weather the storm.
“Leading indicators point to a strong performance of the Kenyan economy in the first quarter of 2022 supported by robust activity in construction, information and communication, wholesale and retail trade, transport and storage and manufacturing sectors.
The economy is expected to remain resilient supported by recovery in agriculture and continued strong performance of the services sector despite the downside risks to global growth in 2022,” the CBK stated.
The CBK expects inflation to hold within the government’s target band of 2.5 and 7.5 per cent even as the risk of inflationary pressures emerges from the prevailing global uncertainties.
The monetary agent’s confidence is backed on government measures to stabilize fuel prices and lower electricity tariffs.
Three MPC surveys’ conducted ahead of Tuesday’s policy meeting have revealed continued optimism about business activity, employment and economic growth prospects in the near-term.
“Nevertheless, respondents were concerned about the impact of the Russia-Ukraine conflict on commodity prices and supply chains, in addition to the increased political activity,” the CBK noted.
Further, the CBK has anchored the resilience of the economy on rebounding tax revenues following eased COVID-19 containment measures and the continued execution of the economic recovery strategy by the government.
Growth in private sector credit has improved to 9.1 per cent as of February from 8.6 per cent in December 2021.
Nevertheless, banks have marked a slight deterioration in asset quality with the industry’s mean non-performing loans (NPLs) ratio rising back to 14 per cent from a lower 13.1 per cent in December 2021.
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