Kenya Economic Outlook
February 20, 2018An economic recovery is underway, after growth was derailed last year by elevated uncertainty during the prolonged election cycle, a crippling drought that damaged agricultural output, and the government’s ongoing cap on lending rates charged by commercial banks. Economic activity expanded again in January against a backdrop of political stability, evidenced by a PMI reading above the 50-point threshold; the private sector returned to growth in December following seven months of contraction. At the same time, the economy’s public and external debt stocks have been piling up while revenue flows have declined, eroding debt affordability. Data released by the Central Bank shows that both domestic debt and external debt jumped by double-digit figures over the previous year in 2017. A deteriorating fiscal position led Moody’s to downgrade Kenya’s credit rating from B1 to B2 on 13 February. The agency views fiscal trends worsening in the near-term, with greater reliance on commercial external debt. However, it assigned a stable outlook, given the economy’s relatively diversified structure, strong growth potential and mature financial sector.
Kenya Economic GrowthIncreased agricultural output, supported by more favorable weather conditions; an expansion in construction activity for planned infrastructure projects; and an upturn in investment should bump up growth this year. That said, the government’s interest rate cap policy will continue to dent growth. Risks to the outlook stem from the economy’s rising debt levels. Met the why particular panelists project GDP growth of 5.3% in 2018, which is unchanged from last month’s forecast, and 5.8% in 2019.
Kenya Economy Data
5 years of Kenya economic forecasts for more than 30 economic indicators.
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|Bond Yield||12.90||0.0 %||Feb 22|
|Exchange Rate||111.8||0.05 %||Feb 22|
|Stock Market||0.2||0.0 %||Feb 22|
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Kenya Economic News
February 5, 2018
The latest composite Purchasing Managers’ Index (PMI), produced by IHS Markit and Stanbic Bank, dipped to 52.9 in January from 53.0 in December.
January 31, 2018
Consumer prices increased 1.32% over the previous month in January, up from a 0.54% month-on-month rise in December.
January 22, 2018
The Central Bank opted to keep the keep the key rate unchanged at 11.00% at its first meeting of 2018 held on 22 January.
January 4, 2018
This rise in the latest composite Purchasing Managers’ Index (PMI) reading, produced by IHS Markit and Stanbic Bank, reflects the return of Kenya’s private sector to expansionary territory in the final leg of 2017 after contracting for eight consecutive months as the political scene, marred by months of protracted uncertainties, begins to stabilize.
December 29, 2017
Consumer prices rose 0.54% over the previous month in December, contrasting November’s 0.23% month-on-month drop.