Kenya Economic Forecast

Kenya Economic Outlook

August 25, 2020

The economy likely contracted in the second quarter due to restrictive measures weighing on productive capacity as well as domestic and foreign demand. Merchandise exports fell at a double-digit rate in the period, while imports dropped by over a quarter year-on-year, highlighting weakened domestic demand. However, early data for the third quarter suggests the economy has begun to rebound. In July, operating conditions in the private sector improved at a strong pace, with the PMI returning to expansionary territory for the first time in seven months, as the continued easing of restrictive measures led to a recovery in demand. In the same month, price pressures eased to a 10-month low, which should have supported private consumption. Meanwhile, international flights resumed on 1 August, which should be further stimulating activity.

Kenya Economic Growth

While a recession should be avoided this year, the economy will still be derailed by Covid-19 and associated containment measures, weighing heavily on domestic and foreign demand. Social distancing measures are seen dragging on output capacity and activity, while foreign measures weigh on tourism and trade. A second locust invasion further clouds the outlook. FocusEconomics analysts project GDP growth of 1.0% in 2020, which is down 0.1 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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