Feb 9, 2023

Mawazo Writing Africa

Writing about the main

World Bank sees Kenya’s economy slowing to 5.5 percent

The World Bank forecasts the Kenyan economy will slow to 5.5% this year amid fears over commodity prices, including fuel, and the impact of the drought.

The bank said that the The country receiving below-average rainfall will negatively impact agricultural performance, leaving nearly 3.1 million Kenyans in need of food aid.

The country’s growth is also being hampered by high commodity prices, which are being impacted by global supply chain shocks the war in Ukraine, which is driving inflation.

World Bank forecasts are below Treasury Department estimates of 6 percent growth after GDP recovered last year and will reach 7.5 in 2021 percent grew, the fastest growth in 11 years.

“Looking ahead, economic growth is expected to moderate in 2022, with real GDP in Q2 022 is expected to grow by 5.5 percent,” the World Bank said in the Kenya Economic Update.

Kenya’s economy saw a significant recovery last year, driven by the recovery in the service sector and the expansion in industrial production.< /p>

However, agriculture, the country’s largest sector, shrank by 0.2 percent in 2021 due to the drought, compared with contributing 0.9 percentage points to GDP growth in 2020.

2021 production estimates show poor rainfall reduced corn production by 3 percent, wheat by 28 percent and beans by 13 percent below 2020 levels.

Below-average rainfall led to a drought that affected the has made food insecure for 3.1 million Kenyans in the pastoral and marginal agricultural areas.

According to the Bank, food insecurity is increasing in Kenya and by September 2022 up to 5 million people will be food insecure need help.

Kenya also faces challenges from upcoming polls, which show the country has experienced a slowdown in election years as companies put investment decisions on hold pending a return to normalcy in the political landscape.

Economic growth, for example, slowed to 4.81 percent in 2017 as a result of the hard-fought presidential election from 5.88 percent a year earlier.

Read:Kenya’s economy is booming during Tanzania Softening Borders

The same trend was seen in 2008, when the aftermath of the deadly December 2007 presidential election caused economic growth to slow to 0.23 percent from 6.865 percent the year before.

The notable exception was in 2013, when the economy grew 5.8 percent after the Supreme Court amicably settled a presidential dispute, compared with 4.56 percent the year before.

Read:East Africa’s economic recovery prospects face headwinds