Central Bank Says it Expects Kenya Economy to Expand by 6.1% in 2021

The Kenyan economy is expected to expand by 6.1 per cent in 2021 and 5.6 per cent next year, the Central Bank has said.

The recovery, however, will likely be subdued by the impact of drought on the agricultural sector.

“The one sector to flag is agriculture, and agriculture remains most uncertain largely because of the rains. It is true there are some parts of the country that are getting adequate rains, and there also parts of the country where there is drought,” Kenya Central Bank Governor Patrick Njoroge said on Wednesday during a virtual media conference.

In 2020, the economy contracted by 0.3 per cent. During the period, “Some sectors have remained quite dynamic. Agriculture is the first of this, construction is also quite buoyant while health services and ICT have also expanded,” said Dr Patrick Njoroge.

The 2020 GDP contraction was largely driven by measures taken by the government to stop the health crisis from expanding.

Tuesday, the CBK held its benchmark lending rate at 7.0%, with its monetary policy committee saying it had taken note of emerging local and global inflationary pressures.

It also remains optimistic of a sustained recovery boosted by the continued rollout of COVID-19 vaccines and subsequent reopening of the economy. 

Leading indicators reflect a strong return of the services sector as the sector reopens. The manufacturing sector has recorded a moderate rebound driven by strengthening local and firming global demand.