Kenya Economic Update, October 2016 : Beyond Resilience--Increasing Productivity of Public Investments
Kenya is one of the bright spots in Sub-Saharan Africa. With economic growth rates sustained at above 5 percent, Kenya has outperformed the regional average, for 8 consecutive years. Robust domestic demand emanating from private consumption and gov...
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| Format: | Report |
| Language: | English en_US |
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World Bank, Nairobi, Kenya
2016
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| Online Access: | http://documents.worldbank.org/curated/en/882161477667623804/Beyond-resilience-increasing-productivity-of-public-investments http://hdl.handle.net/10986/25380 |
| Summary: | Kenya is one of the bright spots in
Sub-Saharan Africa. With economic growth rates sustained at
above 5 percent, Kenya has outperformed the regional
average, for 8 consecutive years. Robust domestic demand
emanating from private consumption and government investment
are the key drivers of growth, underpinned by a stable
macroeconomic environment, lower oil prices,
diversification, improved security perceptions, and ongoing
structural reforms. Medium term economic prospects for Kenya
remain robust. Ongoing public infrastructure investments
will continue to play a ‘crowding-in’ role, easing transport
and energy costs, and supporting economic expansion in
construction andindustry. Private consumption will drive
service sector growth, while agricultural sector will remain
largely dependent on favorable weather conditions and timely
availability of inputs. Though oil prices are expected to
pick-up over the forecast horizon, Kenya’s external sector
account will remain healthy on account of a steady increase
in remittances, a rebound in tourism and a rise in foreign
direct Investment (FDI). Nonetheless, there exist downside
risks that can dent future growth prospects. Risks to
Kenya’s future growth prospects that are not included in our
baseline outlook emanate from both external and domestic
sources. On the external front, these include weaker than
expected growth in the global economy, volatility in global
financial markets and a spike in oil prices. On the domestic
front, these include delays to fiscal consolidation, adverse
weather developments, and potential uncertainties associated
with the run-up to 2017 elections that could lead to a
wait-and-see attitude by investors, thereby dampening
short-term growth prospects. |
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