Kenya’s economic growth forecast for this year has been slashed by the International Monetary Fund (IMF) to 5.3 per cent amid fears that persistent drought, sluggish private sector credit growth and rising prices of oil will slow down the economy.
IMF earlier predicted that the country’s economic growth rate will slow in 2017 within the 5-6 percent range from about 6 percent last year.
IMF, in its latest World Economic Outlook, released Monday, announced an upward review of its forecast for global economic growth in 2017 from 3.1 percent in 2016 to 3.5 percent in 2017 and 3.6 per cent in 2018.
International Monetary Fund said that in the sub-Saharan Africa, a modest recovery is foreseen in 2017. Growth is projected to rise to 2.6 percent in 2017 and 3.5 percent in 2018, largely driven by specific factors in the largest economies, which faced challenging macroeconomic conditions in 2016.
Last week, the World Bank forecast Kenya’s GDP growth decelerated to 5.5 percent, a 0.5 percent point mark down from the 2016 forecast over poll jitters and drought.
The country’s economy expanded by 5.7 percent in the third quarter of 2016, a slight dip from the six percent recorded in the third quarter of 2015 on the back of stunted growth in agricultural, manufacturing, real estate and construction sectors.
Central Bank of Kenya in February downgraded economic growth forecast to 5.7 percent in 2017 from 5.9 percent last year, citing uncertainties in the global economy.