Kenya Economic Forecast

Kenya Economic Outlook

May 21, 2019

Growth surged to an eight-year high in 2018, with ample rainfall buoying the agricultural and electricity generation sectors. Momentum, however, likely waned at the outset of 2019, as delay of the long rainy season curtailed agricultural output, while tighter credit conditions weighed on private consumption and investment. In other news, USD 2.1 billion was recently raised in an oversubscribed dual-tranche Eurobond issue, which will be used to fund infrastructure projects and general budgetary expenses, along with partially or wholly refinancing a USD 750 million Eurobond due to mature in June. Moreover, with revenue collection trailing below target, the president is seeking to enforce a 1.5% housing fund levy on the salaries of employees and employers alike, as part of efforts to build affordable housing under the Big Four Agenda. The policy has sparked uproar, however, with enforcement on hold until the Labor Court hears a case filed by the Consumers Federation of Kenya. 

Kenya Economic Growth

Momentum should be sustained this year on the back of public infrastructure spending and despite the interest rate cap likely continuing to weigh on the domestic economy. The persistence of drought conditions, however, risks further curtailing agricultural activity, while global trade tensions threaten to disrupt exports and remittances inflows. Met the why particular analysts project GDP growth of 5.8% in 2019, which is unchanged from last month’s forecast, and 5.7% in 2020.

Kenya Economy Data

20132014201520162017
Population (million)41.843.044.245.546.7
GDP per capita (USD)1,3221,4341,4331,5661,599
GDP (USD bn)55.361.763.371.274.7
Economic Growth (GDP, annual variation in %)5.95.45.75.94.9
Consumption (annual variation in %)8.44.35.24.77.0
Investment (annual variation in %)2.114.26.6-9.46.3
Industrial Production (annual variation in %)5.45.66.16.04.9
Fiscal Balance (% of GDP)-6.8-7.0-9.6-8.0-9.5
Public Debt (% of GDP)44.545.950.253.259.0
Money (annual variation in %)14.518.612.84.87.5
Inflation Rate (CPI, annual variation in %, eop)7.26.08.06.44.5
Inflation Rate (CPI, annual variation in %)5.76.96.66.38.0
Exchange Rate (vs USD)86.4590.55112.3112.5113.2
Policy Interest Rate (%)8.508.5011.5011.0011.00
Exchange Rate (vs USD, aop)86.1387.9598.27111.5113.4
Current Account (% of GDP)-8.1-9.7-6.8-5.1-6.8
Current Account Balance (USD bn)-4.5-6.0-4.3-3.7-5.1
Trade Balance (USD billion)-11.5-12.4-11.1-7.9-11.9
Exports (USD billion)5.96.15.95.75.7
Imports (USD billion)16.418.515.913.616.6
Exports (annual variation in %)-4.02.7-3.4-2.40.2
Imports (annual variation in %)0.412.6-13.8-14.422.0
International Reserves (USD)6.67.97.57.67.3
External Debt (% of GDP)19.321.024.931.330.5

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Kenya Facts

ValueChangeDate
Bond Yield12.150.0 %May 13
Exchange Rate111.10.05 %May 13
Stock Market0.10.0 %May 11

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