World Bank’s 2019 Global Economic Prospects report has projected that Kenya’s economic growth will rise marginally by 0.1 percent to 5.8 percent in 2019.
The negligible growth has been attributed to the country’s and Africa’s inflation, which is forecasted to skyrocket this year as a result of unfavorable business environment.
“The outlook for the global economy has darkened on account of the tightening global financing conditions, as well as moderated industrial production,” says the World Bank.
Furthermore, it adds that trade fears have intensified and developing markets as well as some that are emerging have been hit with significant financial market distress.
Consecutively, debt vulnerabilities, especially in low-income countries like Kenya, have substantially increased.
“Debt vulnerabilities in emerging market and developing economies, particularly low-income countries, have increased. More frequent severe weather events would raise the possibility of large swings in international food prices, which could deepen poverty,” stated the report.
World Bank says that the growth in sub-Saharan Africa might reach to 3.4 percent in 2019 and rise to an average of 3.7 percent in 2020-21 due to diminished policy uncertainty and improved investment in large economies, together with continued robust growth in non-resource intensive countries.
“However, external headwinds have intensified, as growth among main trading partners’ moderates, global financial conditions tighten, and trade policy uncertainty persist,” the report continued.
The prediction, however, contradicts with the National Treasury’s report that Kenya’s economy will grow by 6.1 percent this year, and 6.2 percent in 2020, 6.4 percent in 2021 and seven percent by 2023.
The Treasury gives a pickup in agricultural and manufacturing activities underpinned by improved weather conditions, strong service sector, stable macroeconomic environment, ongoing public infrastructural investments and sustained business and consumer confidence as the reasons for the consistent growth.
The World Bank, nonetheless, recommends the adoption of policies that sustain the economy by promoting trade integration, boosting human capital, and addressing the challenges associated with informality, particularly in developing economies