IMF Revises Up Economic Forecast for Kenya by 1%

Kenya will receive emergency aid totalling USD 410 million to support its program to address debt vulnerabilities, the International Monetary Fund (IMF) said on Wednesday.

The International Monetary Fund (IMF) revised upwards its 2020 real gross domestic product (GDP) projections for Kenya in its latest World Economic Outlook.

Kenya’s Gross Domestic Product (GDP) will expand one percent this, up from a negative one percent projected in June due to its diversified economy.

It also expects the country’s GDP growth to expand by 4.7 percent in 2021.

Kenya’s Second-quarter 2020 real GDP shrunk 5.7 percent dragged down by the Services sector which was greatly impacted by theCovid-19 containment measures in the review period.

Sub Saharan Africa will grow at an estimated -3 percent with Nigeria and Angola growing at -4 percent. Uganda will slide into recession with annual growth expected at -0.3 percent. But Ethiopia and Tanzania will grow at 1.9 percent. South Africa is expected to witness the sharpest contraction at 8 percent.

The IMF forecast a 2020 global contraction of 4.4 percent, an improvement over a 5.2 percent contraction predicted in June, but said it was still the worst economic crisis since the 1930s Great Depression.

“This crisis is however far from over. In our latest World Economic Outlook, we continue to project a deep recession in 2020,” Gita Gopinath, the Chief Economist of the IMF, said.

“There are broad risks to the upside and to the downside. On the upside, we could have positive development in terms of treatments and vaccines that could hasten the end of this health crisis,” Gopinath said.