Ongoing fiscal consolidation efforts, tight monetary policy, and fading tailwinds from the agricultural rebound are expected to slow down Kenya's economic growth to five per cent in 2024.
The Kenya Economic Update (KEU) released this morning by the World Bank however terms the outlook as 'stronger' compared to compared to December 2023.
The lender had projected Kenya's GDP to expand by 4.5 to 5.2 per cent in December last year.
"This reflects improved macroeconomic conditions following the resolution of the immediate liquidity constraints with the issuance of the February Eurobond,'' says the global bank.
It adds that service sector resilience and the recovery of exports in 2024 are expected to boost growth.
"The growth outlook assumes adequate rainfall, authorities’ staying on course on the planned fiscal consolidation strategy, and the continuous implementation of the government’s structural reform agenda."
It adds that favourable agricultural harvests, moderate inflation, a recovery in employment, and modest growth of credit to the private sector will support growth in private consumption.
Remittance inflows to Kenya are projected to remain resilient, providing further support to household incomes.
The external position is expected to remain favourable and supportive of macroeconomic stability as global trade improves.
