The World Bank has commended the upward trend in the growth of Kenya’s economy, crediting the service sector which contributed about 80 percent of the increase in total GDP.
In their statement released on Wednesday, the bank said the economy was recovering despite the many challenges.
“With a GDP growth at 4.8 percent in 2022, economic performance softened after the strong rebound from the Covid-19 crisis at 7.5 percent in 2021,” the international monetary institution said.
The country’s economy was affected by the drought, elections, drop in revenue collection from major sectors such as tourism, and the global inflation on essential goods.
“The growth rate, however, has remained in line with Kenya’s long-term growth trajectory,”
“Kenya’s GDP growth outpaced that of Sub-Saharan Africa which is estimated to have grown at 3.6 percent in 2022,” the World Bank said.
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It further noted steps taken to address mounting debt… “Fiscal consolidation plays a central role in supporting Kenya’s macroeconomic foundations for inclusive and sustained growth,” World Bank Country Director Keith Hansen said.
As the economy recovers, it is expected that the GDP growth will remain at 5% and incomes are expected to grow at around 3 percent in the medium term.
“The strong GDP growth in the medium term is projected to benefit from reduced crowding out by the government because of fiscal consolidation and will be driven by robust private investment,” said World Bank Kenya Senior Economist Naomi Mathenge.
