Kenya Economic Forecast

Kenya Economic Outlook

November 14, 2017

Economic conditions have continued to deteriorate as the nation remains in the grips of the worst political crisis in a decade. Private sector activity contracted at a record pace in October, reflected by a sharp drop in the PMI to an all-time low. Asserting an improper electoral process that breached Kenya’s constitution, former MP Harun Mwau launched a legal challenge to Uhuru Kenyatta’s victory in the 26 October election re-run, leading to a political standoff. The main opposition, led by Raila Odinga, withdrew from the race over insufficient electoral reforms, paving the way for Kenyatta to secure more than 98% of votes amid a low turnout. Odinga’s supporters boycotted the election. The Supreme Court has until 14 November to declare a verdict on the petition, which calls for the result to be nullified. Rising economic adversities from protracted uncertainty prompted the government to trim its growth forecast for this year to 5.0%–5.1%, down from 5.5%, on 7 November.

Kenya Economic Growth

Heavy rains are expected to offer respite to agricultural output and help bolster growth, although the sudden rains have inflicted damage to infrastructure and disrupted maize drying. Prolonged political deadlock, combined with the continuation of the government’s interest rate cap on commercial bank lending rates—which may take more time than anticipated to scrap—will weigh on growth. FocusEconomics panelists forecast GDP growth of 5.3% in 2018, which is down 0.1 percentage points from last month’s forecast, and projects it rising to 5.8% in 2019.

Kenya Economy Data

Population (million)40.741.843.044.245.5
GDP per capita (USD)1,2431,3221,4331,4271,558
GDP (USD bn)50.655.361.663.170.8
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)
Industrial Production (annual variation in %)
Fiscal Balance (% of GDP)-6.0-6.8-7.0-9.6-8.1
Public Debt (% of GDP)42.144.545.950.453.5
Money (annual variation in %)17.213.818.612.84.8
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)11.008.508.5011.5010.00
Exchange Rate (vs USD)86.0086.4590.55102.3102.5
Exchange Rate (vs USD, aop)84.5386.1387.9598.27101.5
Current Account (% of GDP)-8.4-8.1-9.8-6.8-5.2
Current Account Balance (USD bn)-4.3-4.5-6.0-4.3-3.7
Trade Balance (USD billion)-10.2-10.5-12.4-10.1-7.9
Exports (USD billion)
Imports (USD billion)16.316.418.515.913.6
Exports (annual variation in %)7.0-3.62.7-3.4-2.4
Imports (annual variation in %)11.00.412.6-13.8-14.4
International Reserves (USD)
External Debt (% of GDP)23.524.827.130.4-  

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Kenya Facts

Bond Yield13.200.0 %Dec 06
Exchange Rate102.90.05 %Dec 06
Stock Market0.20.0 %Oct 18

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