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IMF upbeat about Kenya growth

NAIROBI, Kenya, May 25 – The International Monetary Fund (IMF) has projected that Kenya’s economy will grow at between of five and 5.5 percent in 2011.

This projection is similar to that of the Treasury which has put it at anything above five percent.

IMF Advisor for Africa Domenico Fanizza said this year\’s prospects remain strong given the continued investments in all sectors of the economy.

“Strong private sector activity, has translated into in a surge of private sector investment. That certain boost should be able to maintain the rate of growth for this year to the range of five to 5.5 percent of the country\’s Gross Domestic Product,” he said.

The visiting advisor observed that economic activity rebounded last year, driven by strong agricultural production and a dynamic private sector.

The growth was broad-based and the sharing of its benefits was supported by policies to promote financial inclusion.

Building on the impressive growth, Mr Fanizza was hopeful that the main forecast for this year remained positive.

However, he contended that the recent inflationary pressures and insufficient rains present downside risks that would need to be addressed in the coming months.

“The key priorities will be to curb inflation and to strengthen the external position in response to the widening of the current account deficit,” he said.

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Efforts to broaden financial inclusion and deepen the financial markets will also need to be supported by, for example, strengthening the banking supervision and enhanced regulatory frameworks.

Mr Finizza was in the country to conduct the first review of the Sh8 billion that was released as part of the extended credit facility worth Sh44 billion to help address balance-of-payments financing needs and provide an international reserve cushion.

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