Kenya Economic Forecast

Kenya Economic Outlook

November 17, 2020

The economy should have recovered in Q3, albeit frailly, after contracting for the first time in at least a decade in Q2 due to the pandemic. Exports increased in July–August after shrinking in Q2, while the fall in imports softened in the same period. However, this still points to weakened domestic demand. Moving forward, the situation was seemingly upbeat at the outset of Q4: Business conditions improved notably in October, with the private sector PMI climbing to a record high, boosted by strengthening aggregate demand as more restrictions were eased. However, a recent rise in Covid-19 cases prompted a snap-back of containment measures in early November, boding ill for activity. In other news, the government aims to borrow an additional KES 1.0 trillion (around USD 9.2 billion) for the current fiscal year (1 July 2020–30 June 2021) as revenues have dwindled, and is seeking a second IMF loan.

Kenya Economic Growth

Economic activity will suffer this year at the hands of Covid-19, but is projected to grow strongly next year. However, a growing public debt burden will put pressure on credit ratings and minimize room for fiscal stimulus: Revenues have been hit by the pandemic and the country might face difficulties meeting its existing debt obligations. FocusEconomics analysts project GDP growth of 5.0% in 2021, which is up 0.1 percentage points from last month’s projection, and 5.4% in 2022.

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 %)
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)6.6-
Industrial Production (annual variation in %)  
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 %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
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)
Imports (USD billion)15.914.216.617.417.6
Exports (annual variation in %)-3.4-
Imports (annual variation in %)-13.8-
International Reserves (USD)
External Debt (% of GDP)  

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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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