- Saturday, April 20, 2024
By: Shubham Ghosh
THE economy of Kenya is set for a partial recovery after its gross domestic product is projected to grow by 4.5 per cent in 2021 while its economic activity is likely to accelerate to over five per cent in 2022 and 2023, as per an analysis by the World Bank which came out recently.
The eastern African nation witnessed an adverse impact because of the coronavirus pandemic, like several other countries in the world.
The World Bank said in late June that the prospects of Kenya’s continuing recovery, which is not even across sectors with some of them still coping with the pandemic’s impact, depend on the progress of the country’s vaccination effort.
ALSO READ: South Africa unrest: People lost work, investors withdraw money
It said while the base case is for adequate agricultural harvests and a pick-up in industrial activity which is aided by a rising demand from the recovering global economy, activities in many services still need to recover a long distance.
According to the 23rd edition of the Kenya Economy Update, titled ‘Rising Above the Waves’, private consumption in the country is expected to grow stronger, backed by a recovery in wages and domestic incomes and strong remittances.
The report said consumer confidence and business activity should be supported by ongoing vaccination efforts and, over time, the return of mobility to the levels that had prevailed ahead of the pandemic.
Monetary policy accommodation is likely to continue in the near term in the absence of inflationary shocks. Because of fiscal consolidation efforts, the fiscal deficit is also predicted to contract from 8.7 per cent of GDP in 2020-21 to 4.2 per cent in 2023-24.
“The outlook remains unusually uncertain and contingent on the course of the pandemic. We expect that Kenya’s economy will continue its recovery, albeit unevenly and for some sectors only gradually, supported by the government’s plan to vaccinate the entire adult population by mid-2022,” Keith Hansen, World Bank country director for Kenya, said.
