- Allianz however says the projection will be characterized by some risks.
- They include the persistent inflation, standing at 6.8 per cent in January, and the public debt sustainability.
Global financial services firm Allianz Trade has projected Kenya’s GDP growth at a pace of slightly above five per cent this year.
This on the back of the strong growth witnessed last year driven by agriculture, tourism and services as a whole.
"Tourist arrivals for instance, increased by 31 per cent," the firm says in its inaugural country risk atlas, a flagship publication focused on country risk data on insolvencies and the business environment.
Based on the projection, the barometer describes Kenya as a standout performer in Sub-Saharan Africa, boasting an impressive average GDP growth rate of over five per cent in the past decade.
"This is due to a stable macroeconomic environment, sustained investor confidence and a thriving services sector, particularly in telecommunications and financial services."
It however says the projection will be characterised by some risks.
They include the persistent inflation, standing at 6.8 per cent in January that keeps widening the gaps among the population, and the public debt sustainability.
The barometer also raises concern over regional uncertainties such as limited infrastructure, limited purchasing power and supply dependencies, which could further affect the growth prospects.
"This cycle is expected to continue into 2024, although inflation is predicted to gradually moderate," it adds in part.
Nevertheless, Allianz says the country's political risk is elevated as social inequality, corruption and security risks including cross-border spill overs from conflicts in Sudan, Ethiopia and Somalia contribute to the tensions.
It highlights further risks that could be responsible for GDP growth downgrades in different countries in Africa during the year ahead.
Among them are liquidity constraints in an environment of high public and private debt and high interest rates, and below-potential growth in most regions, and lower pricing power for corporates, which it says will drive revenue growth downwards.
"Rising business insolvencies, changes in global supply chains and increasingly polarised geopolitics in a packed election year, with economies accounting for 60 per cent of global GDP heading to polls could also prompt growth downgrades."