The World Bank on Tuesday projected a 5.5 percent collective growth for the Kenyan economy in 2022.
This is an upgrade from 4.9 percent previously attributed to a stronger-than-expected recovery from the coronavirus pandemic in 2021.
According to the 25th edition of the World Bank Kenya Economic Update, Aiming High: Securing Education to Sustain the Recovery, the impact of the war in Ukraine is weighing on the global economic recovery from the pandemic, the growth is higher than the estimated average growth in Sub-Saharan Africa of 4 percent.
In addition, the economy is projected to grow at 5.2 percent on average in 2023–24.
“While Kenya’s economy has been resilient, the multiple recent shocks show the urgency of improving social protection mechanisms to cushion the most vulnerable households,” said World Bank Country Director, Keith Hansen, in a press release on Tuesday.
“This will enable Kenya to move away from other more costly and less well-targeted support measures such as fuel subsidies,” Hansen added.
The report further notes that Kenya’s economic performance remained strong in the early months of 2022, but external challenges have mounted.
“A strong recovery in revenues has supported fiscal performance but this is now being countered by the cost of subsidizing fuel,” according to the report. “The limited passthrough of higher international oil prices to consumers is generating fiscal costs.”
Public debt is projected to decline to 64.9 percent of the gross domestic product in 2023-24, compared with an estimate of 68 percent of GDP in the year through June, according to the World Bank.
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