StanChart Projects  4.6pc Growth for Kenya in 2018

Standard Chartered Bank has projected Kenya’s economy to expand 4.6 percent this year according to the banks’ Chief Economist Razia Khan.

“The Kenyan economy still faces great hedge winds,” she said. “The economy has been unnecessary so… the existence of the rate cap,” “It is time the government got a realistic view on the impact of interest rate caps on the economy in general with a view to resolving the matter so that it deals with other external risks,” she said.

“In Kenya, if you try to set a limit on the interest cap, the quantity of lending may have to be readjusted to that,” Razia emphasised.

However, the economy is expected to hit 5.4 percent in 2018 supported by a recovery in agriculture, improved tourist inflows, and enhanced manufacturing sector.

Razia says “How quickly is that infrastructure going to come back?

“If Kenya is serious about boosting growth, it will need more than fiscal policy. What matters are reforms that drive increased resilience,” she added.

So far, the bank has projected the lowest economic growth projection.

First, the Central Bank of Kenya Governor Dr. Patrick Njoroge predicts a 6.2 percent GDP growth.

“On baseline – without any policy action – we are projecting growth of 2018 in the order of 6.2 per cent, but this is a baseline. It does not include significant positive factors that could be expected in 2018,” said Dr. Njoroge on Tuesday.

Second, Barclays Africa Group Limited (BAGL) is projecting a 5.5 percent economic growth for Kenya this year, up from the 5 percent recorded last year driven by a rebound in tourism activities, improved agricultural yield, and political stability.

However, it will entirely be hinged on political stability and improved weather conditions in 2018, although the country was likely to be dominated by debt sustainability.

Three, the African Economic Outlook for 2018 by the African Development Bank (AfDB), projects that Kenya’s economy will expand by 5.6 per cent in 2018 and 6.2 per cent in 2019.

Read: What to Expect in 2018 For The Kenyan Economy