The Central Bank's forecast is more optimistic than that of the World Bank, which expects expected declines in horticultural exports and tourist arrivals to weigh on the performance of East Africa's biggest economy.
Kenyan Central Bank Governor Patrick Njoroge estimated on January 17 that the country’s GDP growth is expected to accelerate to 6.2% in 2023 from 5.6% in 2022.
“We expect to achieve respectable growth this year,” he said in an interview with Bloomberg on the sidelines of his participation in the World Economic Forum in Davos. Patrick Njoroge explained the resilience of the Kenyan economy by its diversification and its low exposure to the economic disturbances that are shaking the world. “We are very local or regional in terms of business partners,” he said.
The Governor of the Central Bank of Kenya also revealed that the authorities intend to resort to “measured” external borrowing during the current financial year in order to address debt vulnerabilities and ensure debt sustainability.
Kenya is classified by the International Monetary Fund (IMF) as a country at high risk of debt distress. Its public debt reached 900 billion shillings ($72 billion) at the end of last November, according to Central Bank data.
In its latest report “Kenya Economic Update (KEU)” published on December 8, the World Bank estimated that the growth of the Kenyan economy should slow down slightly in the medium term to stand at 5% in 2023 and 5 .3% in 2024, compared to an estimate of 5.5% in 2022.
The institution explained this slowdown by the expected declines in horticultural exports and tourist numbers in a context of declining performance in developed economies.
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