Kenya’s real GDP growth will next year post the third-best performance among its East Africa Community (EAC) partners, new projections by the African Development Bank (AfDB) show, marking an improvement from an earlier forecast.
The bank’s newly released annual East Africa economic outlook report shows that Kenya’s GDP growth is now projected to slow down to 5.3 percent in 2023 from 5.7 percent this year even though the growth would be the third-best performance after Rwanda and Uganda at 7.1 and 6.2 percent, respectively.
The report projects that Tanzania’s GDP would grow by 5 percent next year, followed by Burundi (3.8), and South Sudan (-0.3).
This marks an improvement for Kenya because an earlier outlook report released by AfDB in May had shown that Kenya’s real GDP growth would in 2023 trail the performance of its EAC partners except for Tanzania and Burundi.
The earlier outlook had shown that Rwanda would retain the fastest GDP growth in 2023 at 7.9 percent, followed by South Sudan and the Democratic Republic of Congo (DRC) tied at 6.5 percent, Uganda (6.2), Kenya (5.7), Tanzania (5.6) and Burundi (4.6).
AfDB expects Kenya’s inflationary pressure to ease marginally to 6.9 percent next year, down from about 7.3percent this year.
Kenya’s economy grew by 5.2percent in the second quarter of this year compared with 11 percent in the same period last year, according to data by the Kenya National Bureau of Statistics.
The second quarter’s growth fell sharply in comparison with the same period last year when Kenya’s economy surged thanks to a rebound helped by relaxed Covid-19 curbs in East Africa’s largest economy.
The second quarter of this year showed economic momentum was largely driven by financial services, insurance, transportation, and wholesale and retail trade among others, said the Kenya National Bureau of Statistics.
However, output from agriculture, forestry, and fishing activities contracted for the third consecutive quarter, “mainly attributed to unfavourable weather conditions that characterized the last quarter of 2021 and the first half of 2022.”
Kenya has experienced rapid growth rates in recent years, partly due to its diverse economy, which does not rely on a single commodity or one major trading partner.
The Treasury projects the economy to grow by 5.5percent this year, as it continues to recover from the impact of the Covid-19 pandemic. Growth rebounded to 7.5percent last year after a contraction of 0.3 percent in 2020.
In the first quarter of this year, the economy expanded by 6.8percent from a revised 2.7percent in the same period a year earlier, due to a recovery in most economic activities that had contracted significantly in the first quarter of 2021 due to Covid-19. BY DAILY NATION