Kenya’s economy is forecast to grow 5.5% this year from 7.5% in 2021, with the slowdown linked to the knock-on effects of the war in Ukraine, the World Bank said on Tuesday.
The bank forecast in an economic update on Kenya that gross domestic product (GDP) growth would average 5.2% in 2023-24.
East Africa’s biggest economy suffered its first contraction in nearly three decades in 2020, when GDP fell 0.3%, as the COVID-19 pandemic damaged key sectors like tourism.
“Offsetting the strong economic momentum generated by the pandemic recovery is the impact of the war in Ukraine,” the World Bank said. “High commodity prices will increase import costs, while the projected slowdown in global growth will soften the demand for Kenyan exports.”
The bank said domestic risks to growth included potential fiscal slippage ahead of general elections in August.
Kenya’s central bank forecasts economic growth of 5.7% this year, while the finance ministry forecasts a 6.0% expansion.
The World Bank said Kenya’s public debt was expected to fall to 64.9% of GDP in the 2023/24 (July-June) fiscal year from 67.5% in 2022/23, helped by continued economic growth and lower borrowing costs as a result of an increase in concessional financing.
