NAIROBI: Kenya’s economy will accelerate slightly in 2016, driven by loose fiscal policy, infrastructure projects and robust private consumption, according to Focus Economics. The Spain based economic research firm forecast the country’s economy will grow at a rate of six per cent in 2016, which is unchanged from November’s forecast.
“Nevertheless, a large fiscal deficit and rising public debt, a weak shilling and tight monetary policy represent challenges for the economy, along with corruption and insecurity,” the firm said in the latest consensus forecast for Sub-Saharan Africa.
Last week, the International Monetary Fund projected Kenya’s real gross domestic product growth would accelerate to about six per cent in 2016, on account of continuation of strong investment momentum, effect of good rain on agriculture and a pick-up in tourism following removal of travel advisories from major tourism source markets.
In the Sub-Saharan Africa region, Focus Economics said growth stabilised in the third quarter, mainly due to a remarkable acceleration in Nigeria, driven by increased oil supply. It, however said low prices of oil and other commodities, coupled with negative spillovers from severe droughts, are expected to constrain growth in the region.
“While the economy in sub-Saharan Africa is expected to pick up slightly in 2016 as the global economy will recover timidly and the impact of low oil prices may start to fade, the region will continue to perform below its potential as the main threats to growth are not likely to abate next year,” it said.
