Micro, Small and Medium-Scale Enterprises (MSMEs) are set to fuel 2019 Gross Domestic Product (GDP) if constraints including access to finance are alleviated, Central Bank’s Monetary Policy Committee has projected.
According to the committee, the GDP is expected to hold the momentum it carried over from the first quarter of 2018 where the economy grew by 6 percent compared to 4.7 percent in 2017.
Dr. Patrick Njoroge, CBK Governor, and MPC Chair said that MSMEs have the potential to drive growth this year particularly is access to finance is unlocked.
The private sector credit growth is also projected expected to gain strength in 2019 as opposed to 2018 as a result of the anticipated higher economic activity and easing credit risk, according to the committee.
Nonetheless, the committee also noted that the government’s spending which has been aligned to the Big Four Agenda’s priority sectors including manufacturing, universal healthcare, affordable housing, and food security, is expected to bolster economic activity in 2019.
“Growth is expected to remain strong in 2019, supported by agricultural production, a stable macroeconomic environment, and continued improvement in the business environment,” read the MPC statement.
In 2018, there was improved performance in the country’s economic growth. It was reflected by the higher agricultural production and the continued recovery of the manufacturing sector.
The buoyant services sector also contributed to the growth, particularly trade, information and communication, accommodation and restaurants, transport and storage, and real estate.
Nevertheless, MPC made a decision to retain the CBR at 9 percent meanwhile as it carries on monitoring local and international developments.