The World Bank has upheld Kenya’s growth projection for this year at six per cent, largely unchanged from an estimated 5.9 per cent in 2016.
This comes after local firms cut the growth outlook for this year to below six per cent, citing slower private sector credit growth. Price pressures as a result of failed rains in the last quarter of 2016 is also likely to dampen growth because the economy is agriculturally-driven, some research analysts have forecast.
Analysts at Stanbic Bank on Tuesday downgraded this year’s projection to 5.4 from 5.8 per cent, while those at Cytonn Investments on Monday said they see a 5.4 to 5.7 per cent expansion.
The country’s growth is largely supported by ongoing infrastructure development, recovering tourism and continued growth of the construction sector.
However, the World Bank sees Kenya’s economy posting the seventh-highest expansion in sub-Saharan Africa.
The region is estimated to have recorded the slowest growth in more than two decades at 1.5 per cent last year, bogged down by reduced commodity prices.
This is because oil-producing countries and South Africa account for two-thirds of Africa’s wealth, according to the World Bank.
“Sub-Saharan African growth is expected to pick up modestly to 2.9 per cent in 2017 as the region continues to adjust to lower commodity prices,” the global development lender says in Global Economic Prospects report – Weak Investment in Uncertain Times – on Tuesday. “Growth in South Africa and oil exporters is anticipated to be weaker, while growth in economies that are not natural-resource intensive should remain robust.”
The report projects Ethiopia and Côte d’Ivoire are likely to expand the highest at 8.9 and 8.0 per cent, respectively, buoyed by infrastructural investment and agricultural exports.
Ghana’s economy may be the third-fastest growing in SSA this year at 7.5 per cent, followed by Tanzania, at 7.1 per cent, Sierra Leone ( 6.9 per cent) and Senegal ( 6.8 per cent).
The World Bank sees Rwanda – whose wealth has been expanding at a faster rate due to its smaller size – posting the same pace of growth as Kenya this year at 6.0 per cent.
Uganda, Kenya’s largest trading partner, is tipped to grow at 5.6 per cent.