World Bank says Kenya's economy to slow in 2024

Kenya World Bank says Kenya's economy to slow in 2024

Kenya's economic growth will slow to five percent this year after a "robust" performance in 2023, the World Bank said Wednesday.

The East African powerhouse has been saddled by huge public debt, high inflation and the introduction of numerous new levies and tax hikes by President William Ruto's cash-strapped government.

The World Bank said in a report that while Kenya's real GDP growth had accelerated last year to 5.6 percent from 4.9 percent in 2022, it was expected to slow to five percent this year.

The recovery of the key agricultural sector -- following improved weather conditions -- drove 2023's growth, the report said, with tourism also contributing to a stronger showing.

However, it said Kenyan exports had significantly underperformed, noting "the country has not diversified its products in recent years and has lost competitiveness in the markets to which it exported".

The World Bank report comes just a week before Ruto's government is due to present its budget to parliament on June 13.

The government is projecting a 4.25-trillion-shilling ($32-billion) budget for the fiscal year ending June 30, 2025, up from 3.6 trillion shillings the previous year.

Kenyan authorities forecast average GDP growth of 5.2 percent between 2024 and 2026.

The country's total public debt amounts to around 10 trillion shillings, or around 70 percent of GDP.

Still, the World Bank country director for Kenya, Keith Hansen, welcomed Nairobi's February decision to partly repay a $2-billion Eurobond due to mature later this month.

It was, he said, "a move that significantly eased the immediate liquidity constraints for the year, instilling a sense of calm in the markets".

However, the report added the country needed to tackle "climate-related vulnerabilities, particularly for agricultural exports".

Kenya and other parts of East Africa were badly hit by torrential rainfall earlier this year that killed several hundred people and displaced thousands, badly disrupting the vital agriculture sector.

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Started: 02-07-2024 | Ends: 31-10-2024