Kenya Economic Outlook
April 16, 2019Available data suggests the economy lost steam in Q1 2019. Private credit growth continued to fall in the first two months of the year, likely weighing on private consumption and investment. While the Nairobi High Court ruled the long-standing interest rate cap as unconstitutional last month, some MPs plan to battle hard to uphold the law in the 12-month window awarded to parliament to amend it. Moreover, a decline in remittances in February also likely constrained household spending, while the PMI fell throughout Q1 as weaker domestic demand curbed overall private sector activity. External sector metrics also point to a slowdown: Exports fell sharply in February amid cooling global growth, translating into a wider trade deficit as imports accelerated. Meanwhile, the Treasury recently unveiled plans to issue a third Eurobond to raise USD 2.5 billion to meet debt repayments due in June, signalling deteriorating debt dynamics.
Kenya Economic GrowthDespite signs that growth slowed in Q1, the economy will likely sustain a strong pace of expansion this year, thanks to large-scale infrastructure projects under the “Big Four Agenda” and an acceleration in exports driving an upturn in the external sector. That said, the interest rate cap will likely continue limiting the growth of private consumption and fixed investment. FocusEconomics analysts project GDP growth of 5.8% in 2019, which is unchanged from last month’s forecast, and 5.7% in 2020.
Kenya Economy Data
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|Bond Yield||12.15||0.0 %||Apr 18|
|Exchange Rate||101.4||0.05 %||Apr 22|
|Stock Market||0.1||0.0 %||Apr 22|
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Kenya Economic News
April 3, 2019
Activity in the Kenyan private sector grew at a slightly weaker pace in March, reflected by a fall in the Purchasing Managers’ Index (PMI), produced by IHS Markit and Stanbic Bank, from 51.2 in February to 51.0 in March—the lowest print since November 2017.
March 29, 2019
Consumer prices rose 1.60% over the previous month in March, following a 0.82% month-on-month increase in February.
March 27, 2019
At its latest meeting held on 27 March, the Monetary Policy Committee (MPC) of Kenya’s Central Bank held its benchmark lending rate at 9.00%, where it has been July 2018.
March 5, 2019
Business conditions in the Kenyan private sector improved only modestly in February, with activity in the sector growing at the weakest pace in 15 months.
February 28, 2019
Consumer prices rose 0.82% over the previous month in February, following a 0.35% month-on-month increase in January.