World Bank projects 5.5pc growth for Kenya this year
The World Bank projects the Kenyan economy will slow down to 5.5 per cent this year amid concerns over the impact of drought and increased commodity prices.
The Bretton Woods Institution said the country will receive below average rains that will negatively affect agricultural performance leaving nearly 3.1 million Kenyans in need of food aid.
Growth will also be dampened by high commodity prices triggered by the war in Ukraine that is driving up inflation in the country.
The World Bank projection is lower than the Treasury estimates of six percent growth after GDP rebounded last year to grow at 7.5 percent in 2021, the fastest pace in 11 years.
“Looking ahead, economic growth is expected to moderate in 2022 with real GDP projected to grow by 5.5 per cent in 2022,” the World Bank said in the Kenya Economic Update.
Marked rebound
Kenya’s economy staged a marked rebound last year driven by recovery in the services sector and expansion in industrial output.
Agriculture the country’s largest sector, however, contracted by 0.2 percent in last year affected by dry conditions, compared to a 0.9 percentage point contribution to GDP growth in 2020.
The 2021 production estimates indicate that poor rains reduced maize output by three percent, wheat by 28 percent and beans by 13 percent below 2020 levels.
Below average rainfall led to a drought that has left 3.1 million Kenyans food insecure especially in the pastoral and marginal agricultural areas.
The bank says food insecurity is rising in Kenya and up to five million people will need food assistance by September 2022.
General Election
Kenya also faces the challenge of an oncoming General Election with the country having a history of slowing down during and after election when firms put investment decisions on ice pending a return to normalcy.
Economic growth, for example, slowed to 4.81 percent in 2017 as a result of the bitterly-contested presidential poll from 5.88 percent a year earlier.
The same trend was witnessed in 2008 when the aftermath of the December 2007 presidential election sank economy to a growth to 0.23 percent from 6.865 percent the year before.
The notable exception was in 2013 when economy grew 5.8 percent after the Supreme Court amicably resolved a presidential dispute compared with 4.56 percent the year before. BY DAILY NATION

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