IMF cuts Kenya's economic growth forecast for 2019 and 2020

by Reuters
Tuesday, 15 October 2019 15:44 GMT

NAIROBI, Oct 15 (Reuters) - Kenya's economy is expected to expand by 5.6% this year and 6.0% in 2020, the International Monetary Fund said on Tuesday, lowering its forecasts from earlier this year.

The Fund did not say what was behind the lower projections in its latest World Economic Outlook. In April it forecast growth of 5.8% for 2019, and 5.9% for next year.

With a well-diversified economy that does not depend on a single commodity or sector, Kenya has enjoyed rapid growth in recent years, but critics say it is not enough to lift many citizens out of poverty.

The IMF's latest forecast is also lower than the government's.

In September, Kenya's Finance Ministry forecast the economy would grow by 6.0% this year after 6.3% in 2018.

Data from the Kenya National Bureau of Statistics last month showed the economy grew by 5.6% in the second quarter of this year, down from 6.4% in the same period a year earlier.

It attributed this to a slowdown in the farming sector, which accounts for nearly a third of output, manufacturing and transport.

As well as runaway spending, President Uhuru Kenyatta's government has been criticised for failing to stamp out widespread corruption.

Critics also accuse the government of saddling future generations with too much debt. The government says higher borrowing is required to fund infrastructure. (Reporting by George Obulutsa; Editing by Omar Mohammed and Giles Elgood)

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