Kenya’s Economic Growth Projected to Increase 6.6 % in 2021

Kenya’s economic growth has been projected by the National Treasury to increase by 6.6 percent in 2021, up from the 0.6 percent recorded in 2020.

According to Albert Mwenda, the acting director-general of budget fiscal and economic affairs with the National Treasury, Kenya has already experienced a relatively strong economic recovery in the first three months of the year.

“The economy will be supported by a stable macro-economic environment as well as ongoing investments in the country’s national development big four agenda,” Mwenda said during the launch of the 2022/23 financial year and the medium-term budget preparation process.

The National Treasury, however, noted that the economy has not fully recovered from the negative impacts of the COVID-19 pandemic.

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Ukur Yattani, the CS of National Treasury, stated that the prospects for Kenya’s economic recovery will center on the progress of the vaccination effort which could see the economy rebound to above six percent over the medium-term.

Yattani added that a lot still needs to be done to reverse the negative impacts of the pandemic, including disruption of business, loss of jobs and incomes.

Meanwhile, in late June, the World Bank gave its projections for Kenya’s economic growth in 2021 where it projected it to grow by 4.5 percent.

The Kenya Economic Update (KEU) by the institution stated that the country’s economy is expected to sustain recovery and gradually return to growth of over 5 percent on average in 2022-23.

The report banked its stats on an upturn in the industry supported by reopening of the economy and strong capital spending, a moderate recovery in services as vaccination rollout steadily progresses, and adequate agricultural harvests and sales, helped by rising external demand from the recovering global economy.

The report further noted that Kenya’s fiscal deficit is projected to decline from 8.7 percent of the GDP in the financial year 2020/21 to 4.2 percent in the financial year 2023/24 due to the fiscal consolidation effort.

The COVID-19 pandemic significantly dampened Kenya’s economic growth which was increasing at an annual pace of above 5 percent. The containment measures of the pandemic delivered a triple shock to the economy stifling most drivers of demand.

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Nonetheless, as the country the world continues to reopen its economies, trade is bound to pick up and gradual and steady growth will be realized.