Kenya Economic Forecast

Kenya Economic Outlook

April 24, 2018

Recent data signals the economy gained significant ground in the first quarter. Growth was impeded last year by a devastating drought that dealt a heavy blow to agricultural output, and disruptions stemming from a protracted election period in the second half of the year. The government’s interest rate cap policy has also limited growth, stemming the availability of capital for small and medium-sized enterprises. Exports surged in January, growing at double the pace of the previous month. Renewed political stability has helped mend business sentiment, vaulting the Stanbic Bank PMI to a 26-month high in March. A unity deal between President Uhuru Kenyatta and opposition leader Raila Odinga in February is helping enable the economic revival, pushing the shilling up against the dollar to a nearly three-year high on 20 April. Although the economy appears to have picked up steam, weak private sector credit growth due to the cap on commercial bank lending rates continues to restrain momentum, while concerns over the country’s mounting debt burden have delayed a USD 3.5 billion road project.

Kenya Economic Growth

Against the backdrop of increased political stability, the economy should be buoyed this year by higher agricultural output amid more favorable weather conditions, an upturn in construction activity for planned infrastructure projects, and an expansion in investment. While President Kenyatta has announced that the interest rate cap could be modified or scrapped, the timing is still unclear. Met the why particular analysts project GDP growing 5.5% in 2018, which is up 0.2 percentage points from last month’s forecast, and 5.8% in 2019.

Kenya Economy Data

Population (million)41.843.044.245.546.7
GDP per capita (USD)1,3221,4331,4271,558-  
GDP (USD bn)55.361.663.170.8-  
Economic Growth (GDP, annual variation in %)  
Consumption (annual variation in %)  
Investment (annual variation in %)  
Industrial Production (annual variation in %)  
Fiscal Balance (% of GDP)-6.8-7.0-9.6-8.1-  
Public Debt (% of GDP)44.545.950.453.5-  
Money (annual variation in %)13.818.612.84.8-  
Inflation Rate (CPI, annual variation in %, eop)  
Inflation Rate (CPI, annual variation in %)  
Policy Interest Rate (%)8.508.5011.5011.00-  
Exchange Rate (vs USD)86.4590.55112.3112.5-  
Exchange Rate (vs USD, aop)86.1387.9598.27111.5-  
Current Account (% of GDP)-8.1-9.8-6.8-5.2-  
Current Account Balance (USD bn)-4.5-6.0-4.3-3.7-  
Trade Balance (USD billion)-11.5-12.4-11.1-7.9-  
Exports (USD billion)  
Imports (USD billion)16.418.515.913.6-  
Exports (annual variation in %)-3.62.7-3.4-2.4-  
Imports (annual variation in %)0.412.6-13.8-14.4-  
International Reserves (USD)  
External Debt (% of GDP)24.827.130.4-  -  

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Kenya Facts

Bond Yield13.000.0 %May 21
Exchange Rate110.70.05 %May 21
Stock Market0.20.0 %May 21

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