World Bank Predicts Kenya’s Economy to rebound by 6.9 percent in 2021
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The Covid-19 pandemic resulted in massive revenue losses across the world, which saw Kenya’s economy contract by 1 percent, as per a report by the Central Bank of Kenya.
The report forecasts Kenya’s economy to rebound by 6.9 percent in 2021 and 5.7 percent in 2022.
World Bank indicated that Kenya will experience the fastest economic rebound in East Africa with Rwanda’s expected to come second at 5.7 percent in 2021.
Tanzania is expected to rebound by 5.5 percent, Uganda by 2.8 percent, and Burundi by 2 percent. The report, however, projected South Sudan’s economy to contract 3.4 percent.
World Bank attributed the economic contraction to lockdowns as a result of the pandemic. The report stated that Kenya, which rakes in a lot of revenue from travel and tourism, was largely affected, however, lauded the country for the efforts to slow the pandemic.
Inflation trends in the country were uneven in 2020, as persistently soft demand helped contain inflationary pressures.
The World Bank lauded Kenya for measures undertaken to recover from the economic adversities of the pandemic, for instance by embracing new technologies.
“Some governments have already aimed to facilitate network expansion and reduce congestion, such as by adopting new technologies -Google’s Loon network in Kenya,” the report reads in part.
World Bank highlighted that challenges in access to Covid-19 vaccines, debt sustainability, natural disasters and insecurity as major threats to economies in East Africa.
It, however, cautioned against bad loans held by banks, which in Kenya stand at Ksh402.3 billion as reported by CBK.
The country has made efforts towards economic recovery with the National Treasury scrapping tax reliefs as of December 31, 2020.