Kenya’s economic growth projection for 2020 ‘remains highly uncertain’ with expectations it will drop to 1.5 percent and contract 1 percent in the worst-case scenario the World Bank said on Wednesday.
In its Kenya Economic Update: Turbulent Times for Growth in Kenya – Policy Options during the COVID-19 Pandemic, the outcome will hinge on how the pandemic plays out internationally and within Kenya, along with policy actions taken to mitigate the situation.
“Growth in services and manufacturing will be severely impacted by the COVID-19 pandemic,” the World Bank said in its economic update for Kenya released on Wednesday.
“Measures taken to slow down the rate of infection, including home confinement, travel restrictions, the closure of schools and entertainment spots, the suspension of public gatherings and conferences, and a nightly curfew are expected to affect both production and consumption.”
“Supporting small businesses and protecting jobs to cope with the negative effects of COVID-19 crisis is particularly critical at this time,” said Peter W Chacha, World BankSenior Economist and Lead Author of the report.
“This could be done by ensuring that vulnerable households have cash-on-hand, workers continue to receive salaries – even when temporarily laid-off-and that firms have enough cash flow (to pay workers and suppliers) and avoid bankruptcies.”
Kenya’s medium-term growth is projected to rebound fast (to about 5.6 percent over the medium term), on assumption that investor confidence will be restored soon after the COVID-19 pandemic is contained.
