By George Mwangi
Special for Dow Jones Newswires
Kenya‘s economy is forecast to grow at an annual rate of 4.9% in 2022 and 2023, the World Bank said Tuesday, but cautioned that the Covid-19 pandemic remains a major source of uncertainty.
“This outlook takes into account that some sub-sectors have bounced back strongly (e.g., education), but others only partially and face a much more protracted recovery (e.g., international tourism),” the bank said in its Kenya Economic Update report.
The projection is close to the pre-pandemic average annual growth rate of 5.0% from 2010 to 2019, the bank said. The economy contracted 0.3% in 2020 due to the pandemic.
The baseline projections assume normal rains, which should support agricultural harvests to drive food processing, sustain export growth, help stem price pressures and support household consumption, the bank said. Kenya’s main agricultural exports include coffee and tea.
Substantial vaccination progress will be needed to drive a continued recovery in hotels and restaurants, trade, transport, and other services, it said.
Aside from Covid-19, another key domestic risk is an intensification of the drought that is already afflicting parts of the country, while the primary external risks are weaker global growth, higher-than-anticipated energy prices and tighter external financing conditions, the report said.
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