Kenya Economic Forecast

Kenya Economic Outlook

June 21, 2022

The economy is likely performing well compared to its regional peers so far in 2022, amid healthy credit growth and strong activity in the construction, IT, retail, transport and manufacturing sectors. That said, growth is likely easing from 2021. The war in Ukraine, global supply constraints and the domestic drought have spurred both consumer and producer price pressures in recent months. Survey data suggests this is eating into demand somewhat, with the private-sector PMI averaging lower in the first five months of 2022 relative to last year. Moreover, the drought is hurting agricultural output and has raised the amount of people facing food insecurity to 3.5 million. In other news, in June the government reportedly backed out of a USD 1 billion Eurobond sale due to elevated bond yields, and is also considering rolling back fuel subsidies to limit the gaping budget deficit.

Kenya Economic Growth

GDP growth will decelerate this year, as higher inflationary pressures, drought and tighter monetary policy temper demand. That said, Kenya should still record strong growth compared to the average for Sub-Saharan Africa. The shaky fiscal position, extreme weather events and political tensions in the run-up to and following the August elections are key factors to watch. FocusEconomics analysts project GDP growth of 5.2% in 2022, which is down 0.1 percentage points from last month’s forecast, and 5.1% in 2023.

Kenya Economy Data

2015 2016 2017 2018 2019
Population (million)44.245.546.748.049.4
GDP per capita (USD)1,4331,5281,6851,8321,931
GDP (USD bn)63.369.578.788.095.3
Economic Growth (GDP, annual variation in %)5.75.94.86.35.4
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)6.6-9.28.31.32.4
Industrial Production (annual variation in %)7.35.93.85.3-  
Fiscal Balance (% of GDP)-8.1-7.7-9.0-7.0-7.6
Public Debt (% of GDP)50.254.556.059.362.1
Money (annual variation in %)14.24.27.48.05.4
Inflation Rate (CPI, annual variation in %, eop)8.06.44.55.75.8
Inflation Rate (CPI, annual variation in %)6.66.38.04.75.1
Policy Interest Rate (%)11.5010.0010.009.008.50
Exchange Rate (vs USD)102.3102.5103.2101.9101.4
Exchange Rate (vs USD, aop)98.27101.5103.4101.3102.0
Current Account (% of GDP)-6.8-4.9-6.2-4.9-5.0
Current Account Balance (USD bn)-4.3-3.4-4.9-4.3-4.7
Trade Balance (USD billion)-10.1-8.5-10.9-11.4-11.8
Exports (USD billion)5.95.75.76.15.8
Imports (USD billion)15.914.216.617.417.6
Exports (annual variation in %)-3.4-2.40.25.9-4.0
Imports (annual variation in %)-13.8-11.017.54.71.2
International Reserves (USD)7.57.67.38.29.1
External Debt (% of GDP)31.231.234.135.8-  

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Kenya Facts

Value Change Date
Bond Yield12.200.0 %Dec 31
Exchange Rate101.40.05 %Jan 01
Stock Market0.40.0 %Jan 07

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