CBK: Kenya’s Economic Growth Set To Steadily Rise Amid Global Tension
The Central Bank of Kenya (CBK) has revised its economic growth forecast for the country, lowering it from 5.7% to 5.5%.
This move contradicts international experts’ expectations of a 5% growth in Kenya this year.
The slight revision represents underlying challenges and changes in the economic landscape.
CBK Governor, Dr Kamau Thuge, delivered the updated forecast on Wednesday, stating that the economy remains strong despite the downward adjustment.
“We anticipate a growth rate of 5.5 per cent for 2025, aligning closely with this year’s projected growth of 5.4 per cent,” Thugge stated.
The MPC Press Briefing by Governor Dr. Kamau Thugge is now live on https://t.co/gA41V2zyAO
— Central Bank of Kenya (@CBKKenya) August 7, 2024
Despite recent adverse weather conditions, Thugge maintained his forecast of 5.7% growth for 2024 in June.
“Despite the recent flooding in some parts of the country, the economy is expected to remain strong in 2024, supported by the resilient services sector and robust performance of the agricultural sector,” he asserted during a news conference.
The Kenyan economy, which expanded by an estimated 5.8 percent in the first quarter of the year, faced a slew of challenges, including rising public debt, which poses significant risks to financial stability.
Experts have consistently warned that rising debt levels could jeopardize future economic prospects.
Last year, the economy expanded by 5.6%, a rate that many hoped would be maintained or improved upon.
International institutions, such as the World Bank, have also commented on Kenya’s economic prospects.
In April, the World Bank forecasted 5% growth for the country, owing to increased investment as a result of restored access to international capital markets.
This influx is expected to boost investor confidence, increase capital inflows, and broaden credit availability to the private sector by reducing domestic government borrowing.
The World Bank’s latest Africa’s Pulse report identifies several growth drivers for Kenya.
These include a recovery in agriculture and tourism, as well as increased regional integration.
The report predicts that the Kenyan economy will grow steadily by at least 5.2 percent between 2025 and 2026.
Globally, the Economic Outlook forecasts a stable global GDP growth rate of 3.1% in 2024, similar to the growth rate in 2023, with a slight increase to 3.2% expected in 2025.
Kenya’s economic performance is expected to be consistent with global trends, albeit influenced by regional and domestic factors.
One of the most important factors influencing Kenya’s economic trajectory is the resilience of its service sector.
The sector has performed admirably, even in the face of natural disasters like the recent floods.
This resilience has been the foundation of the CBK’s optimistic projections.
CBK: Kenya’s Economic Growth Set To Steadily Rise Amid Global Tension
