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Economy

Global firms cut Kenya 2019 growth prospects

Vendors wait customers
Vendors wait customers at an open air market in Nairobi. PHOTO | ROBERT NGUGI | NMG 

World’s leading lenders, consultancies and think-tanks have marginally cut Kenya’s growth prospects for 2019, citing Nairobi’s reducing headroom to access more funds internationally amid slow growth in bank loans to businesses and households.

A consensus growth outlook from 12 global firms indicates the country’s economy is likely to expand by 5.8 percent, 0.1 percentage points lower than last month’s projection and unchanged from this year’s forecast.

“Growth is expected to pick up next year, underpinned by solid domestic demand and strong capital inflows,” say researchers at FocusEconomics, a Barcelona-based economic forecast and analysis firm that compiles the global forecast data on sub-Saharan Africa, in their November report.

“However, Parliament’s decision to maintain the interest rate cap on commercial bank lending rates, along with the slow pace of fiscal tightening, may limit the government’s ability to secure additional funds from the International Monetary Fund (IMF) and other lenders to finance the FY 2018–2019 budget.”

Washington- headquartered Frontier Strategy is projecting the highest growth for Kenya in 2019 at 6.8 percent followed by New York-based brokerage house Citigroup Global Markets and France’s lender PNB Paribas at 6.1 and 6.0 percent, respectively.

London-headquartered Euromonitor International sees the economy expanding by 5.9 percent, while UK’s HSBC (six percent) and Economist Intelligence Unit each project a 5.8 percent growth.

Others are JPMorgan (5.7 percent), France-based credit insurer Euler Hermes (5.7 percent, Oxford Economics (5.6 per cent), Standard Chartered (5.6 percent) Fitch Solutions (5.2 percent) and consultancy firm Capital Economics of UK (5.5 per cent).

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