Kenya’s economy is expected to grow at a slightly faster rate this year. According to the World Bank, thanks to a recovery in the key agricultural sector.
The East African biggest economy will grow by 5.0% in 2023. According to the bank’s latest biannual Kenya Economic Update report. Up from 4.8% last year.
Following a two-year drought, many farming areas have received adequate rainfall in recent months. This will boost production and reduce inflationary pressure.
The growth outlook, however, faces several risks. According to the World Bank, including any new global shocks that could reduce demand for exports.
Kenya is also dealing with rising public debt repayments. That has put strain on government finances, but the report’s authors expect it to cope well.
“While the debt remains vulnerable to distress, it is still sustainable,” said Naomi Mathenge; a senior economist at the bank and one of the report’s authors.
President William Ruto’s administration, which took office in September. Has slowed the rate of debt accumulation and sought lower-cost financing from bilateral and multilateral lenders, she said.
The report predicts that the, total public debt is expected to fall to 64.8% of GDP at the end of this year, down from 67.4% at the end of 2022.
Ruto’s administration, under pressure to raise more revenue, has proposed a slew of tax increases, which have sparked outrage.
According to Mathenge, the additional taxes may reduce consumption.
As stated by the World Bank, Kenya could turn the threat of climate change into an opportunity. By courting green investments from international investors looking to reduce their carbon footprint in their supply chains.
According to the bank, it contributes less than 1% of annual global greenhouse gas emissions, providing opportunities to trade more of its carbon credits.
