- IMF says tighter financial conditions and volatile commodity prices are a pain to growth.
- Adds that the slow growth is also occasioned by rising food and energy prices that are striking at the country.
The country’s economic growth prospects to the end of this year has been projected to a slow of 5.3 per cent by the International Monetary Fund (IMF).
This is down from last year’s projection of 7.5 per cent.
In its latest Regional Economic Outlook dubbed, Living on the edge’, the lender attributes the slower growth to downturns in advanced economies and emerging markets.
It also says tighter financial conditions and volatile commodity prices are a pain to growth.
The lender adds that the slow growth is occasioned by rising food and energy prices that are striking at the country.
“Public debt and inflation are at levels not seen in decades,” the lender says.
IMF projects further a slow down in Kenya's economic growth of 5.1 per cent in 2023 amid the tightening economy.
Uganda’s economy is projected to grow by 4.4 per cent this year whereas Tanzania's is projected at 4.5 per cent.
Sub Saharan Africa’s economy is expected to grow by 3.6 per cent this year, much slower compared to last year’s growth of 4.7 per cent.
“Late last year, Sub Saharan Africa appeared to be on a strong recovery path out of a long pandemic. Unfortunately, this progress has been abruptly interrupted by turmoil in global markets, placing further pressures on policymakers in the region,” IMF says.
Kenya’s policy rate has increased by an average of 1.25 per cent to 8.25 per cent this year, being the second highest rate increase in East African region after Uganda’s 2.5 per cent increase.
Following worldwide trends, the region's inflation has increased faster and more persistently than previously anticipated.
This reflects the mounting prices for essential food and energy items, which comprise about 50 per cent of the region’s consumption basket.