Speaking on Tuesday, World Bank Country Director Diarietou Gaye attributed the slow growth to drought facing the country and slowdown in private sector credit that is seen stalling growth during the year.
“Kenya faces a marked slowdown in credit growth to the private sector. At 4.3 per cent, this remains well below the ten-year average of 19 per cent and is weighing on private investment and household consumption.
“Given the headwinds from the ongoing drought, weak credit growth and pick-up in oil prices, GDP growth is expected to decelerate to 5.5 percent in 2017,” Gaye noted.
However, the bank said that growth was expected to pick up in 2018 with a projection of 5.8 percent GDP growth.
“GDP growth is expected to accelerate to 5.8 percent and 6.1 percent in 2018 and 2019 respectively,” the World Bank said in its update.
The announcement comes after the Central Bank adjusted Kenya's anticipated economic growth of 2017 by two points.
CBK downgraded the country’s economic growth forecast from 5.9 percent early anticipated to 5.7 per cent, citing uncertainties in the global economy amid a ravaging drought.
Agriculture, which is the main backbone of the economy, is expected to perform below bar this year as a result of food producing regions having been severely affected by the ongoing drought.
The current drought has caused water shortage in the country as well as lack of food for livestock which many communities rely on.
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