NAIROBI (Xinhua) --
The World Bank has projected Kenya’s economy to
grow by 5.7 percent in 2019, down from an estimated growth of
5.8 percent in 2018, an official said on Tuesday.
Chacha, senior economist at World Bank group told journalists in
Nairobi that the economic slowdown is partly due to a potential
drag from drought conditions in the country.
"The medium-term growth outlook is stable but recent threats
of drought could drag down growth. GDP growth is projected at
5.7 percent in 2019 after accounting for potential drag from
drought, rising to 5.9 percent and 6 percent, respectively in
2020 and 2021, supported by private consumption, a pickup in
industrial activity and still strong performance in the services
sector," Chacha said during the release of the 19th edition of
the Kenya Economic Update.
Chacha noted that currently Kenya’s growth is also being
supported by ongoing key investments to support implementation
of the country’s national development blueprint, the Big Four
Agenda as well as improved business sentiment.
He added that a strong pick-up in economic activity in the
first quarter of 2019 was reflected by real growth in consumer
spending and stronger investor sentiment.
"Nonetheless, a delayed start to the March-May 2019 ‘long’
rainy season could affect the planting season-resulting in poor
harvests," he revealed.
According to the report, performance in the services industry
is projected to remain stable as the sector is expected to grow
at an average rate of 6.5 percent over the medium term.
The study indicates that private consumption is expected to
continue spurring growth even as government consumption tapers
due to fiscal consolidation.
The report shows that recovery in private consumption is
underpinned by improving purchasing power especially due to a
growing middle class, low inflation as well as solid remittances
The review also urges the government to fast-track a
comprehensive solution to factors that led to the imposition of
interest rate caps for an eventual repeal of the caps and
revival of the potency of monetary policy.
"The continued retention of interest rate caps has
constrained monetary policy space," says the survey.