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Global economic growth is expected to come in at 3.0% in 2019 as per data from the International Monetary Fund (IMF), significantly lower than the 3.6% recorded in 2018.
This performance has mainly been driven by increased policy uncertainty across major economies amidst trade tensions such as the ongoing US – China Trade War, which has weakened business sentiments, hence causing a reduction in industrial output. Central Banks’ policy stance in advanced economies adjusted towards economic easing, with the US Federal Reserve cutting the Federal Funds rate in July and September.
The European Central Bank also reduced its deposit rate and announced the resumption of quantitative easing.
On the African front, According to World Bank’s latest African Pulse Issue, Sub-Saharan Africa’s economic performance remained sluggish in 2019 with their preliminary projections indicating that the region grew marginally by 2.6% in 2019 from 2.5% in 2018.
The growth was hampered by a challenging external environment, which saw the softening of global growth, falling commodity prices, increased trade tensions leading to heightened uncertainty, and subdued agricultural production partly due to drought in various countries in the region, coupled with security concerns, which affected production in some countries,
Back home, the Kenyan economy recorded slower levels of economic growth, averaging 5.4% for the first three quarters of 2019, compared to an average of 6.0% in a similar period in 2018, which was driven by (i) a slowdown in agricultural activities, which saw the sector record an average growth of 4.2% for the first 3 quarters of 2019, representing a 1.1% points decline from the 5.3% recorded in the same period of review in 2018, and (ii) decreased output in transport and electricity activities, which grew on average by 7.0% and 5.5% in the first 3 quarters of 2019, representing declines of 1.6% points and 2.1% points, respectively, compared to the 8.6% and 7.6% recorded in the same period of review in 2018, respectively.