World Bank revises Kenya’s economic growth to 5.5% in 2022
The World Bank estimates Kenya’s economy to grow by 5.5 percent this year, an upward revision from December estimates of 4.9 percent.
“Notwithstanding the more adverse external economic environment, the growth projection for 2022 has still been upgraded to take into account the stronger than expected recovery in 2021, feeding through to the annual growth comparison in 2022,” said the World Bank in a report published Tuesday.
Kenya’s current account deficit is estimated at six percent of total put, better known as Gross Domestic Product (GDP) from a 5.5 percent estimate in 2021 due to the high cost of importing goods.
This is due to the ongoing war between Russia and Ukraine, which is now entering what could become a protracted period of feeble growth and elevated inflation.
The war, according to the World Bank Tuesday is expected to subtract up to 50 basis points from Kenya’s growth this year, and a further 30 basis points in 2023.
On the global front, however, the World Bank slashed the 2022 global growth forecast to 2.9 percent, 1.2 percentage points below the January forecast.
The Russia-Ukraine conflict and COVID-19 pandemic have magnified the slowdown in the global economy.
The World Bank also warned of the risk of stagflation, with potentially harmful consequences for middle- and low-income economies alike.