NAIROBI, Kenya, Mar 16 – The global outbreak of coronavirus – COVID-19 – is expected to drag the country’s growth of the gross domestic product in the first quarter of 2020, a new report has said.
A report by Genghis Capital indicates that a reduced supply of goods and services due to the virus is expected to reduce growth in the period under review.
“Businesses with global supply chains have borne the brunt of COVID-19. In addition, the travel restrictions will impact negatively the tourism sector,” reads the report.
The disease has now infected almost 170,000 people and killed more than 6,000 with several countries going into lockdown as Europe becomes the new epicenter of the outbreak.
Additionally, idiosyncratic risks such as amorphous weather patterns and the desert locust’s infestation are expected to impact growth.
The report expects the fluidity of these risks to have a spillover effect into the second quarter of 2020.
World Bank had projected for the economy to grow by 5.9 percent in the medium-term and by 6 percent for the full year, underpinned by private consumption, a pick-up in industrial activity and still strong performance in the services sector.
Last week, the World Health Organization declared the coronavirus Disease as a pandemic, characterized by its global spread and severity.
Several sectors have suffered as a result of the pandemic in the country; the tourism sector, for instance, is expected to be a major casualty with sector’s cabinet secretary Najib Balala expecting travel restrictions to serve the sector a final blow.
Air travel is also another affected sector. Last week, Kenya Association of Travel Agents said the sector had recorded a 6 percent decline in traveler bookings owing to the global outbreak of the coronavirus.
Imports from China have also been affected, falling by 36.6 percent in the first two months of 2020 owing to coronavirus.
The securities market was also not spared. On Friday, the country’s confirmation of the disease sent shares tumbling which led the NSE to halt trading activity after the benchmark index plunged by more than 5 percent.
On the other hand, the current locust outbreak in Kenya has been the worst of its kind, ever experienced in 70 years.
Pasture and croplands have already suffered damage several counties with the Food and Agriculture Organization saying there are potentially severe consequences where millions rely on agriculture and livestock rearing for their survival.