The Kenyan economy stands a risk of under-performing owing to deteriorating security and severe drought that has hit the bread basket areas of Rift Valley. East Africa’s largest economy will probably expand an annual 4.7 percent in 2014 and 2015, the World Bank said in a bi-annual economic report
The lender in December forecast expansion of 5.1 percent this year and 5.2 percent next year.
The bank also revealed that the economy performed miserably in the first quarter (January–March) of this year, growing by 2.7 percent compared to 5.7 percent in a similar period last year. “We expect that the economy will grow by 4.7 percent this year (2014),” said John Randa, the Bank’s Senior Economist.
Volatile security Mr. Randa noted that the major downsides to the projected economic growth include the deteriorating security situation in the country, inadequate and erratic rainfall, volatile security situation in the Middle East vis-à-vis oil prices. Others include tightened global monetary conditions, which is feared to create volatility in the forex market and domestic interest rates.
“If these risks persist, then we would not achieve the growth rate we have projected,” he said.
Rainfall was below average in some farming areas during the main wet season from March to May in Kenya, which is the world’s largest exporter of black tea and relies on agriculture to generate more than a fifth of its economic output. The dry weather cut farming yields and led to crop failure in some cases, according to the Kenya Meteorological Department.
Tourism, which is the second-biggest foreign-currency earner after tea shipments, has been damaged by a spate of attacks claimed by Islamist al-Shabaab militants, including a raid on a Nairobi mall in September that left at least 67 people dead.
No comments:
Post a Comment