Economy

Economy seen rebounding to 6.9pc growth

nairobi city skyline

Nairobi, the capital city. PHOTO | NMG

The economy is seen rebounding to a growth of between 4.7 and 6.9 percent in 2021 from barely a percentage growth this year, offering hope to millions of households which were plunged into poverty by the devastating shocks of Covid-19 containment measures.

Economists at the Treasury, International Monetary Fund and the World Bank Group have forecast economic activity to recover from the adverse effects of the pandemic that brought key sectors such as tourism and education to their knees.

The World Bank Group, which estimates the economy contracted by 1.0 to 1.5 percent in 2020, sees uninterrupted resumption of schools from January lifting gross domestic output to a growth of 6.9 percent in 2021.

World Bank economists have taken a more optimistic year-on-year growth outlook on Kenya than their counterparts at the IMF who in October forecast the economy to pick up from an estimated 1.0 percent to 4.7 percent growth in 2021.

The Treasury, which in November downgraded growth outlook for 2020 to 0.6 from 2.5 percent, sees economic outlook expanding 6.4 percent in 2021.

“The growth outlook will be supported by stable macroeconomic environment, ongoing investments in strategic priorities of the government under the ‘Big Four’ agenda, turn around in trade as economies recover from Covid-19 pandemic and expected favourable weather that will support agricultural output,” Treasury secretary Ukur Yatani says 2021 outlook.

Travel restrictions and shutdown of hotels as well as closure of schools in March pushed the economy into a trough in the April-June 2020, with GDP — a measure of economic output — shrinking 5.7 percent.

The World Bank estimates that an additional two million persons in Kenya were rendered poor by the pandemic.