Drought and Political uncertainty to impact on Kenya’s 2017 growth

Kenya has lowered its 2017 economic growth forecast to 5.5 per cent from from 5.9 percent due to drought and political uncertainty.

The drought earlier this year hurt agriculture, which accounts for 30 per cent of output, said Kamau Thugge, the principal secretary in the ministry of finance.

The revision by the National Treasury on Kenya’s 2017 economic growth comes after the World Bank and the International Monetary Fund (IMF) revising their projections downwards to 5.5 percent and 5.3percent, from 6.0 percent and 5.7 percent, respectively, in June.

Both institutions cited a slowdown in the agricultural sector and private sector credit growth as being the core reasons for the downward revision of the GDP growth expectation.

However, the National Treasury has stated that it projects the economy to expand by 6.5percent per year in the medium-term supported by increased government spending on infrastructural developments.