Citibank expects Kenyan economy to grow by 5.5 per cent this year supported by growth in the manufacturing and services sector. This is compared to a growth rate of 4.7 per cent last year. But the Government’s plan to revise its calculations of the gross domestic product (GDP) could see the total value of all goods and services produced in the country rise by an estimated 15-20 per cent this year, according to the US-based financial conglomerate. “The provisional indications are that the revision will be around 15 to 20 per cent. This would increase GDP in 2013 to around $50-53 billion (Sh4.35 trillion to Sh4.611 trillion) from our estimate of its current level of around $44.1 billion Sh3.84 trillion in 2013,” says David Cowan, the bank’s Head Economist for Africa. According to Citi, the economy is unlikely to grow at 5.8 per cent as projected by the National Treasury.
The bank says the economy is grappling with serious challenges including drought, infrastructure constraints and insecurity, which have a negative impact on tourism and the wider corporate investments.
Mr Cowan says the rebound in economic activities after last year’s general elections has been weaker than expected. He says the economic growth prospects could also be undermined by food price inflation, which is potentially picking up.