Markets & Finance

World Bank forecasts Kenya’s GDP growth at 6pc for 2015

road

Road construction in Eldoret town. The World Bank says Kenya is due to become one of the fastest-growing economies in the region, citing falling oil prices and bigger infrastructure investments. PHOTO | FILE

Kenya is due to become one of the fastest-growing economies in east Africa, with a growth forecast of 6.0 per cent in 2015 and 6.6 per cent in 2016, the World Bank said on Thursday, citing falling oil prices and bigger infrastructure investments.

Kenya's economy grew by an estimated 5.4 per cent in 2014, the bank said in its latest economic update, while growth could accelerate to 7.0 per cent in 2017.

"After growing an estimated 5.4 per cent in 2014, its economy is poised to be among the fastest growing in the region," the report said.

But the bank also said Kenya's exports growth has been lagging that of imports, and urged the country to support the manufacturing sector to boost exports.

"Sluggish external demand for exports, especially from the Euro area and emerging economies, has contributed to the widening of the current account deficit in recent years," the bank said.

Last September, Kenya changed the base calculation year for measuring its gross domestic product to 2009 from 2001, sending the east African nation into the continent's top 10 economies.

READ: Size of Kenya's economy revised upwards by 25 per cent

Analysts say the east African nation has struggled to achieve its full growth potential in recent years.

Its tourism sector, one of Kenya's top foreign currency earners, has been struggling due to a spate of attacks blamed on al Shabaab militants from neighbouring Somalia, including the 2013 attack in Nairobi's Westgate Mall that killed 67 people.

READ: Kenya's debt sustainable at 46pc of GDP, Ndung'u says

-Reuters-