Kenya Economic Forecast

Kenya Economic Outlook

May 26, 2020

The economy has further deteriorated in the second quarter as confinement measures to slow the spread of Covid-19 are constraining domestic activity, while lockdowns abroad are depressing tourism revenues and remittance inflows. In April, the private sector PMI hit a two-and-a-half-year low amid social-distancing measures and input shortages. Exacerbating matters, heavy rains are further threatening food security and agricultural production, following the locust invasion earlier in the year. In a bid to cushion the hit to the economy, the government is planning an additional USD 500 million stimulus package, while the World Bank on 20 May approved a USD 1.0 billion loan aimed to help fill the budget gap generated by the coronavirus shock. This comes on the heels of a USD 739 million disbursement from the IMF earlier in May. Against a deteriorating fiscal backdrop, on 7 May Moody’s revised its outlook from stable to negative, while affirming its B2 rating.

Kenya Economic Growth

The coronavirus pandemic and its associated confinement measures are set to deal a heavy blow to the economy this year. Subdued global demand and restrictions to travel will depress exports and the tourism sector. Meanwhile, the threat of a second wave of locust swarms poses a further downside risk to the outlook. FocusEconomics analysts project GDP growth of 1.5% in 2020, which is down 0.4 percentage points from last month’s forecast, and 5.3% in 2021.

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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