The Treasury building in Nairobi. The economy was expected to grow by 5.3 per cent last year, according to the Treasury’s projections. PHOTO | FILE
Investment managers expect the economy to grow at a minimum of six per cent this year, a survey by HTM Capital shows.
The analysts from 10 investment firms interviewed said they expected the economy to benefit from one-off additions of between two and 2.5 per cent from infrastructure projects such as the standard railway gauge.
“Real GDP growth will definitely cross the six per cent mark in 2015,” said a respondent. Eighty per cent of those interviewed by HTM, a Nairobi-based research and analysis firm, said they were more optimistic of 2015 but their main concern is contraction of the tourism sector.
The analysts’ expectations are in line with those of the World Bank which expects growth to be strong in East Africa, supported by FDI flows at the onset of oil activity.
The economy was expected to grow by 5.3 per cent last year, according to the Treasury’s projections.
It had initially been projected to grow at 5.8 per cent but a reversal in the tourism sector due to security challenges in Mombasa forced the Treasury to cut the expectations.
Other factors expected to spur the economy are low energy prices pegged on falling crude prices.
The analysts, however, fear the rising budget resulting from high recurrent expenditure and infrastructure development could result in aggressive domestic borrowing that will push up interest rates.
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