The World Bank is expecting Kenya’s economy to expand to 6.0% growth from this years 5.8%. The projection is attributed to the favourable weather outlook the country has enjoyed this year.
It said that Kenya, the East Africa’s largest economy has grown by an average of over 5% in the last five years but many investors have raised concerns over ballooning public debt, which rose above 62% of GDP last year, from 59.1% in 2017.
National Treasury has indicated that it is reviewing its budget for the current financial year to trim the government’s expenditure and set realistic revenue collection targets.
Central Bank of Kenya Governor Patrick Njoroge said in September that they will embank on a monetary easing plan if the fiscal cuts are maintained to achieve a balance.
The World Bank also warned that the projections may face downside risks as potential droughts and failure by the government to cut its expenditure and slow down in national growth.
The Bank appreciated the prospect of the removal of a cap on commercial lending rates, saying it stands a great chance of boosting the economy.