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UN forecasts strong growth for Kenya, warns on debt

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Kenya's economy expanded nearly 6 percent last year. FILE PHOTO | NMG 

Economic growth is expected to remain strong in Kenya this and next year, the United Nations said on Monday while also warning of persistent income inequality and debt risks.

Kenya's economy expanded nearly 6 percent last year, and will sustain that level in 2019 and 2020, the World Economic Situation and Prospects 2019 report said.

Despite the brisk growth rate the county has enjoyed in recent years, "the situation remains almost unchanged regarding income distribution," the UN noted.

In Kenya the bottom 20 percent of earners received about eight percent of total income in 2015. The top 20 percent got close to 48 percent.

Income inequality remained just as pronounced in 2015 -- the latest year for which these statistics are available.

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The resulting gap is filled by external financing, the report noted, citing increased borrowing from China and on the international bond market.

“The debt position is expected to deteriorate in the next few years, increasing the risk of external debt distress.”

“Furthermore,” the UN read, “more pressure on debt-servicing is expected, due to tightening of the United States monetary policy and a stronger US dollar.”

On the positive side of the region’s economic ledger, inflation is expected to remain moderate in most countries in 2018 and to decelerate further in 2019.

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