Kenya’s economy has demonstrated remarkable resilience amidst the prevailing political environment and is projected to record a 5.5 percent growth in 2018.
International Monetary Fund (IMF) has, therefore urged the government to intensify efforts to tame the current economic policy challenges.
Resident Representative Jan Mikkelsen, said the expected growth is supported by remarkable resilience the economy has demonstrated despite recent political uncertainty and general economic slowdown.
Speaking during a breakfast meeting on economic outlook for the Sub Saharan Africa and Kenya, Mikkelsen said the economic growth is expected to increase to about 5.5 percent next year.
This however is likely to happen if the political environment remains stable and government deepen changes to tame current economic policy gaps, said Mikkelsen
He urged the government to contain fiscal and debt vulnerabilities and improve public investment management, noting the need to pursue new policy options in order to stimulate impressive growth rate.
There is need to reduce fiscal deficit in addition to expanding revenue and contain spending as well as in investment. There is need for the government to eliminate interest rates caps while ensuring competition in the banking sector, he further added.
Treasury Cabinet Secretary Henry Rotich last week said government was determined to ensure fiscal deficit was maintained at 6.4 percent in the current financial year and further reduced to below 6 percent in the 2018/19 financial year and 4 percent by 2019/20 lowering our debt-to-GDP ratio.
Associate Professor of Political Economy Robert Mudida said public debt was a big concern which if not checked, would lead to economic woes and economic repression.
There is need for the government to intensify public financial management to maximize resource uptake, intensify export diversification and encourage high savings within the economy in order to attract more investment, said Prof. Mudida
During the meeting, IMF noted the broad-based slowdown in sub-Saharan Africa is easing and growth is expected to pick up to 2.6 percent in 2017 from last year’s 1.4 percent.
A budget review and outlook paper (BROP) released in September showed that the level of public debt to Gross Domestic Product GDP) ratio was expected to rise to 59 percent from a previous target of 51.8 percent.
Source: Kenya News Agency