Kenya's economic prospects in 2018 looks bleak
Kenyans may also need to brace themselves for Inflation next year with the shillings dipping even lower against the dollar in the face of poll jittery.
The National Treasury has revised further downwards its 2017 GDP growth projection for Kenya to 5.0% from 5.5% previously to reflect the adverse effects of prolonged uncertainty around the electioneering period.
Since early this year, Kenya’s economy has taken a beating mainly occasioned by politics.
The country for instance lost about Sh700 billion ($6.7b) in the past four months alone due to political jittery.
This coming on the backdrop of an ongoing drought, high cost of living and low investment confidence in Kenya, 2018 without a doubt is going to be a hard year for Kenyans.
Already symptoms are emerging with the Kenya Dairy Board (KDB) warning that milk prices will rise from January following poor production this year occasioned by drought and depletion of powder milk.
Drastic decline in rice production at Kenya’s largest irrigation scheme due to drought has pushed up retail price of rice by 38 per cent, piling pressure on households that are already grappling with the high cost of living in a sluggish economy.
Kenyans may also need to brace themselves for Inflation next year with the shilling dipping even lower against the dollar in the face of poll jittery.
The readjustment by the National Treasury follows a previous downward revision in September where it down grounded the country’s economic outlook to 5.5% from 5.7% after an assessment of the effects of the drought that the country was facing, which spilled over beyond Q1’2017.
Similarly, the World Bank and IMF cut their 2017 Kenya GDP projections to 5.5% and 5.3% from 6.0% and 5.7%, respectively, citing the drought’s effect on inflation and agricultural production, and slowing private sector credit growth.
The only silver lining for Kenya though is its economy has become more diversified in the recent years and hence likely to weather some of the storm.
Real estate and manufacturing for instance have been steadily gaining ground in recent years.
In the Q2’2016, Real estate was the most improved sector, increasing its share by 0.4% y/y to 8.6% from 8.2%.
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