Central Bank Optimistic on Kenyan Economy Amid Pandemic

The Monetary Policy Committee (MPC) of the Central Bank is meets Wednesday for the bi-monthly review of monetary policy.

Dr Patrick Njoroge, CBK Governor.

The Central Bank forecasts a positive prospect for the Kenya economy post the pandemic with growth of 6.4 percent in 2021, according to Dr Patrick Njoroge.

Dr Njoroge Thurday in a post-Monetary Policy Committee meeting, he said taking into account the recent growth projections for our trading partners, Kenya’s Gross Domestic Product (GDP) growth in 2020 is forecast to decline sharply to about 2.3 percent.

“Overall 2.3 percent, this is much lower than our earlier estimates in the year at 6.2 percent and March estimates of 3.4 percent. There are wide uncertainties …there is a wide error band around it,” said Dr Njoroge.

According to the CBK, the construction sector is bound to contract by 51 percent, the transport sector by 10 percent, the agriculture sector 2 percent.

However, the ICT and health sectors are expected to expand 5 percent and 3 percent respectively.

On the other hand, the apex bank is optimistic about growth going forward.

“We expect 2021 to be a rebound, currently the estimate is 6.4 percent… however, we will obviously revise that.”

This is compared to an expected expansion of 2.3 percent this year according to Njoroge.