FocusEconomics says drought and disputed election results are likely to pull down growth to 4.9 per cent.
The new growth projection represents a downgrade from the five per cent in its last month’s outlook.
This, if realised, will be the slowest growth since 2012 when national wealth grew by 4.6 per cent.
Global economists see Kenya growing at the slowest pace this year on reduced agricultural production and prolonged electoral process.
A consensus forecast by the Barcelona-based FocusEconomics, an economic analysis firm which tracks growth projection from leading banks, consultancies and think-tanks, says drought and disputed election results are likely to pull down growth to 4.9 per cent.
The new growth projection represents a downgrade from the five per cent in its last month’s outlook. This, if realised, will be the slowest growth since 2012 when national wealth grew by 4.6 per cent.
“Growth will remain subdued as agricultural output continues to be negatively impacted by the drought, and private activity takes time to recover,” FocusEconomics says in its September outlook report on Kenya, published on Tuesday.
“Our panelists expect GDP (Gross Domestic Product) growth to slow to 4.9 per cent in 2017, which is down 0.1 percentage points from last month’s forecast, before picking up to 5.5 per cent in 2018.”
Opposition National Super Alliance (Nasa) has contested the re-election of President Uhuru Kenyatta in the Supreme Court in a case to be determined by the end of next week.
Investors have, however, praised the credibility of the electoral process, with the NSE 20 Share Index crossing the psychological 4,000 points on the first day of trade after Mr Kenyatta was declared the winner.
The index, an indicator of average capital gains, was 0.37 per cent up on Wednesday to 4028.56 points.
“While markets reacted positively to Kenyatta’s re-election, and assertions by the opposition of foul play failed to garner any substantial support, there is little cause for celebration, as the Kenyan economy faces intensifying economic woes,” FocusEconomics analysts say in the report.
“Political stability will be central to a brighter outlook for the economy. An escalating debt burden and high unemployment have also thrust the economy into stormy waters.”
Kenya’s public and publicly-guaranteed debt in March rose 7.5 per cent year-on-year to Sh4.04 trillion, or 54.4 per cent of GDP, the Central Bank of Kenya (CBK) said in a quarterly economic review report in July.
The Treasury has maintained that the debt is sustainable despite concerns by analysts.
The country’s growth slowed to 4.7 per cent in the first quarter of the year from 5.9 per cent a year earlier, pulled down largely by a 1.1 per cent drop in agricultural production amid declining growth in the private sector credit, the Kenya National Bureau of Statistics said on June 30.
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Note: The results are not exact but very close to the actual.
