FORECAST

Kenya's growth seen edging up to 6% in 2020 – World Bank

Growth in US is forecast to slow to 1.8 per cent this year, reflecting the negative impact of earlier tariff increases and elevated uncertainty

In Summary
  • The positive review is likely to have been informed by the scrapping of interest cap law in November
  • Global economic growth is forecast to edge up to 2.5 per cent in 2020
A carpenter cuts a piece of frame during the construction of the dias used during the swearing in ceremony of President elect Uhuru Kenyatta at Kasarani Stadium.
A carpenter cuts a piece of frame during the construction of the dias used during the swearing in ceremony of President elect Uhuru Kenyatta at Kasarani Stadium.
Image: CHARLES KIMANI

World Bank has projected Kenya's economy to expand by six per cent in 2020 underpinned by private consumption, a pick-up in industrial activity and still strong performance in the services sector.

This is a 10 basis points edge compared to 5.9 per cent projected last year.

The positive review is likely to have been informed by the scrapping of interest cap law in November. The law introduced in 2016 had curtailed the country's economic growth with the private sector starved of credit.

 

The global lender also expects the country's inflation to remain within the government’s target range of 7.5 per cent while the current account deficit is projected to remain manageable.

Global economic growth is forecast to edge up to 2.5 per cent in 2020 as investment and trade gradually recover from last year’s significant weakness but downward risks persist.

Growth among advanced economies as a group is anticipated to slip to 1.4 per cent in 2020 in part due to continued softness in manufacturing. Growth in emerging market and developing economies is expected to accelerate this year to 4.1 per cent

“With growth in emerging and developing economies likely to remain slow, policymakers should seize the opportunity to undertake structural reforms that boost broad-based growth, which is essential to poverty reduction,” World Bank Group vice president for Equitable Growth, Finance and Institutions, Ceyla Pazarbasioglu said.

Last year, the lender slashed the growth to 2.4 per cent from three per cent the previous year. The global growth is expected to rise by a percentage point up to 2022.

Sub Saharan growth on other hand is expected to pick up to 2.9 per cent, 0.5 per cent jump compared to last year , on assumption that investor confidence improves in some large economies, energy bottlenecks ease, a pickup in oil production contributes to recovery in oil exporters and robust growth continues among agricultural commodity exporters.

Growth in US is forecast to slow to 1.8 per cent this year, reflecting the negative impact of earlier tariff increases and elevated uncertainty. Euro area growth is projected to slip to a downwardly revised one per cent in 2020 amid weak industrial activity.