NAIROBI, Kenya Nov 29 – NCBA Group Monday projected a 5.8 percent growth in Kenya’s Gross Domestic Product (GDP) in 2021, a 0.6 percent contraction in 2020 as opposed to the Central Bank of Kenya (CBK)’s projection of 6.1 percent growth.
This was revealed in their Regional Economic Outlook Report that further projected a 5.2 percent GDP growth in 2022, mainly credited to the fast healthcare action by the government to soften the blow of the pandemic on the economic sector.
Commenting on the results, NCBA Group Managing Director, John Gachora noted that economic growth would be driven by key sectors such as manufacturing, trade, real estate, health care, and financial services.
Additionally, he noted that due to the rebasing of national accounts, sectors that were hard hit by the pandemic such as accommodation and transport, are on an upward scale to contribute greatly to the GDP.
“The transition to normalcy that began in late 2020 will continue as public and business anxiety over the virus wanes and stringent containment measures begin to diminish,” Gachora said in a statement.
The report further revealed that the country’s economic recovery could be affected by high input costs, rising energy prices, a steep tax landscape, and weak exchange rates that could cause significant price pressures with negative implications for the purchasing power of consumers.
However, he noted that the economy would not be affected by the upcoming 2022 General elections, citing that past cycles in Kenya and other countries have shown recent government interventions to ensure the GDP is not affected.
He added that the bank was optimistic that investments could increase immediately post-the election, offsetting any pre-election lull.
“Concerns over the uncertainty presented by the 2022 elections cannot be gainsaid. However, confidence in institutional maturity and the Judiciary’s ability to resolve election disputes has risen in recent years, providing the much-needed respite. This is anchoring confidence ahead of the transition,” he added.