Albeit concerned, the World Bank’s current outlook on Kenya’s prospective growth for next year has only reduced slightly.
The Bank estimates that Kenya, one of Africa’s fastest-growing economies, will have a growth projection of 5% as opposed to its prior projection of 5.5%. The Bank also predicted that there would be development in 2024.
“Kenya is set to grow at 5 per cent in 2023 –down from 5.5— and back up to 5.3 percent in 2024,” the World Bank said in the Kenya Economic Update.
This reduction is coming as a result of the country’s current economic struggles. High rates of inflation, food insecurity, fuel price hike, and the effects of an ongoing drought, are some of the reasons the bank believes Kenya may struggle slightly more than it had predicted.
Kenya’s inflation rate currently sits at 8.5%, rising from the 5.4% it began this year. This inflation surpasses the Central Bank of Kenya’s (CBK) 7.5 percent ceiling target band.
Andrew Dabalen, the World Bank chief economist for Africa stressed that the rising inflation in the country needs to be brought under control.
“If inflation is left unchecked and it runs rampant, it is the fastest, one of the surest ways of increasing the ranks of the poor,” He said.
The bank also noted that the Russia-Ukraine war could significantly deter the economic growth in the Horn of Africa.
The Bank also showed concern for the who of Sub-Saharan Africa as its analysis of the region denotes that economic growth will slow down to 3.3 per cent this year from 4.1 per cent recorded in 2021.
Earlier this week, Deloitte, a consultancy firm also showed concern for the region, citing a lack of data as the reason foreign investment opportunities are sorely lacking. Read story here.
