Kenya’s Economy is Projected to grow by 6.4% in 2021
Kenya’s economy is projected to recover and grow by 6.4% in 2021. In a draft of the 2021 budget policy Statement by the treasury, they noted that the economy had been adversely affected by the worldwide pandemic Covid-19, resulting in the economy contracting.
In 2020, the Kenyan economy was adversely affected by the outbreak of Covid-19 Pandemic and the swift containment measures, which have not only disrupted the normal lives and livelihoods but also to a greater extent businesses and economic activities. As a result, our economy is estimated to slow down to around 0.6 % in 2020 from a growth of 5.4 % in 2019. Looking ahead, the economy is projected to recover and grow by about 6.4 % in 2021 and above 6.2 % over the medium term.” said the treasury
Economic Outlook for 2021
The treasury noted that the growth outlook for 2021, will be supported by the stable macroeconomic environment, the ongoing public investments in infrastructure projects, the Economic Stimulus Program being implemented and the planned Post Covid-19 Economic Recovery Strategy. A turn around in trade as economies recover from Covid-19 Pandemic and expected favorable weather will support agricultural output.
The government also noted that it expects revenue collection to grow by 9% to kes 1.829 Trillion at the end of the fiscal year 2020/2021, from kes 1.675 trillion collected at the end of the fiscal year 2019/2020
These factors are expected to push up consumer demand and increase the public and private sector investment reinforcing the projected growth.
However, the government acknowledged the risks brought about by the persistence of Covid-19 and the required lockdowns and is currently implementing an Economic Stimulus Program that is expected to return the economy to the growth trajectory it was on before corona. The program is expected to increase demand for local goods and services, cushioning vulnerable Kenyans, secure household food security for the poor, and create employment and incomes.
The government is also finalizing a Post Covid-19 Economic Recovery Strategy (ERS), which will mitigate the adverse impacts of the Pandemic on the economy and further reposition the economy on a steady and sustainable growth trajectory.