Kenya Economy Likely to Grow 6.6% in Fiscal Year 2022/23

The Kenyan economy is expected to expand 6.6 per cent in the financial year 2022/23 (FY22) from an estimated 0.6 percent in 2020.

The growth will be supported by the government’s medium-term growth targets.

“Kenya’s economic recovery will center on the progress of the vaccination effort, macroeconomic stability, and implementation of the projects under the “Big Four Plan”. We remain hopeful that our economy will rebound to above 6.0 percent over the medium-term from a growth of 0.6 percent in 2020,” National Treasury and Planning Cabinet Secretary Ukur Yatani said.

Yatani however, said the coronavirus pandemic and heightened political activity ahead of the 2022 general elections remain great risks.

He was speaking Thursday during the launch of the FY2022/23 & Medium-Term budget preparation process.

Treasury on the other hand expects the budget deficit to narrow to 5.6 per cent of gross domestic product in 2022-23 from a target of 7.5 per cent of GDP in the current fiscal year. 

The FY2022/23 and Medium Term Budget Preparation Process is ahead of the usual timeframe to enable prioritization of government programs and engagement with stakeholders noting that 2022 falls within the General election cycle.

Underscoring the importance of the Sector Working Group process, CS Yatani said that the process will provide an ideal framework for Ministries, Departments, and Agencies (MDAs) to identify, prioritize and allocate resources to areas that will have the greatest impact in addressing the challenges occasioned by the negative effects of Covid-19 which include: rising unemployment, health challenges and income inequalities.

National Treasury’s Medium-Term Fiscal Framework will be anchored on:

(i) Real GDP growth above 6.0%;
(ii) Maintaining Inflation within the range of ±2.5% of the target 5%;
(iii) Safeguarding stability of Interest and exchange rates;
(iv) Gradual improvement in revenue collection to 18.5%; and
(v) Gradual reduction in expenditures to about 22% of GDP over the medium term in line with the fiscal consolidation policy