Kenyan economy will grow faster than those of the United States (US), China and Russia in 2025. This is according to Central Bank of Kenya (CBK) Annual Report and Financial Statements for 2023/2024.
CBK cited the International Monetary Fund (IMF) World Economic Outlook (WEO) July 2024 update which made this prediction.
In 2024, Kenya was projected to grow at 5.4%, which is faster than the U.S (2.6%), Euro Area (0.9%), Japan (0.7%), United Kingdom (0.1%), Russia (1.3%), China (5.0%), and South Africa (0.9%).
Kenya is projected to grow at 5.5% in 2025, which is faster than the U.S (1.9%), Euro Area (1.5%), Japan (1.0%), United Kingdom (1.5%), Russia (1.2%), China (4.5%), and South Africa (1.2%).
The WEO projected growth in the advanced to remain stable at 1.7 percent in 2024 before rising to 1.8 percent in 2025.
In the emerging market and developing economies (EMDES), growth is projected to slow down to 4.3 percent in 2024 and 2025, respectively, from 4.4 percent in 2023, reflecting weaker than expected activity in China, India and Brazil.
Growth in sub-Saharan Africa (SSA) is projected to rise from 3.0 percent in 2023 to 3.7 percent in 2024 and 4.1 percent in 2025.
In South Africa, growth is expected to be broad based, supported by diminishing bottlenecks to port and rail infrastructure and fewer power outages.
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Similarly, growth in Nigeria is expected at 3.1 percent in 2024 from 2.9 percent in 2023, supported by strong investment and improving business confidence in Kenya.
Real GDP growth is projected to moderate to 5.4 percent in 2024 from 5.6 percent in 2023, on account of slow growth in the manufacturing sector.
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However, the agricultural and services sectors are expected to record robust growth.
According to WEO, the global financial markets have remained resilient to the tightening of monetary policy, but vulnerabilities remain.
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Global Inflation-CBK
Global headline inflation is expected to fall to 5.9 percent and 4.4 percent in 2024 and 2025, respectively.
However, this is a slower pace due to persistently higher than average inflation in services even with stronger disinflation in goods.
Global demand is expected to pick up while the global commodity market pressures are expected to rise marginally.
The demand reflects increased consumer spending, particularly in the service sector, as demand for travel, tourism, and recreational activities rises.
Further, the world trade growth is expected to increase to 3.1 percent and 3.4 percent in 2024 and 2025, respectively from 2.0 percent in 2023.
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