Kenya’s economy is projected to grow in 2021 at 7.6 percent according to the International Monetary Fund (IMF).
The multilateral lender says that Kenya’s economy is now picking up speed after the COVID-19 shock, but the pandemic has left deep imprints on the country’s fiscal and debt positions.
The Bretton woods institution says growth in 2020 overall is likely to have been close to zero and it is projected to bounce back strongly in 2021.
According to IMF, on a year-on year-basis, output growth recovered from minus 5.5 percent in the second quarter of 2020 to minus 1.1 percent in the third quarter.
IMF is also concerned that Kenya’s fiscal and debt positions have also worsened, adding to difficulties that existed even before the shock.
IMF has also projected the global economy grow by 6 percent in 2021, 0.5 percentage point above the January forecast.
In its latest global financial stability report released Tuesday, the multilateral lender said the United States is expected to surpass its pre-COVID-19 Gross Domestic Product (GDP) level this year, while China returned to its pre-COVID-19 GDP in 2020.
However, many other countries are not expected to do so until 2023.
IMF noted that the output losses had been large for countries that rely on tourism and commodity exports.
The report states that within-country income inequality will likely increase because young workers and those with lower skills remain more heavily affected.
The Washington based financial institution is urging policymakers to tackle rising financial vulnerabilities amid an asynchronous and divergent global economic recovery.
