approves U.S. $108.5 million
dollars to support Kenya’s growth
economic growth has kept a good pace despite
the slowdown of exports to and tourism from Europe
(Xinhua) -- The
International Monetary Fund (IMF) has approved 108.5
million U.S. dollars under the extended credit
facility to support ongoing economic reforms in
IMF said the money was approved by the Executive
Board after the completion of the latest review,
bringing the total disbursements under the
arrangement to 628.2 million dollars.
completing the review, the executive board also
granted a waiver for the nonobservance of the
continuous performance criterion on new central
government and central government guaranteed
external payment arrears,” the IMF said in a
statement received on Wednesday.
Bretton Wood institution said the East African
nation has stayed the course in its economic
reforms, with good results, noting that the
inflationary pressures have been tamed.
IMF said Kenya’s economic growth has kept a good
pace despite the slowdown of exports to and tourism
to the IMF, international reserves are on the rise
and the deficit of the external current account has
shrunk significantly - excluding capital-goods
imports that have surged because of oil exploration.
said the public debt-to-gross domestic product ratio
has declined, despite the large budgetary costs of
implementing the new constitution, preparing for the
March elections, and the recent wage increases in
the civil service.
growth is expected in 2013 supported by good
weather conditions. With firmer expectations of
low inflation, there is scope for further monetary
easing, although the Central Bank of Kenya will
need to remain vigilant to the risks of possible
adverse shocks or a reversal of capital flows,”
said fiscal consolidation should continue by
lowering non- priority expenditures and boosting
revenue mobilization through improvements in tax
administration, the introduction of a new
value-added tax law and a financial transaction tax.
under Kenya’s economic program was favorable
through end-December 2012. The fiscal outcome was in
line with the program, international reserves
exceeded the target, while monetary policy was eased
appropriately, the IMF said.
Bretton Wood institution said the Kenyan authorities
have also made good progress with their structural
reform efforts in the areas of public financial
management and tax reform, adding that financial
sector reforms and the reform of the pay for civil
servants have also recently advanced.
soundness indicators have remained favorable.
Nevertheless, policies should focus on closely
monitoring the health of the banking system and
adapting banking supervision to growing
regionalization, while the government seeks to
complete the demutualization of the Nairobi Stock
Exchange,” IMF said.
said risks from global financial and economic
conditions have lessened, adding that the prospects
for commercially-viable oil discoveries could
further improve the medium- to long-term outlook,
which will require policies to promote diversified
and balanced growth to avoid excessive reliance on
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