The country set to experience depressed economic growth in the first quarter of 2017

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CBK Governor Dr Patrick Njorige the economy is expected to slow in the first quater of the year 

UPESINEWS BUSINESS REPORTER,NAIROBI,31ST JAN,2017-CBK Governor Patrick Njoroge says  growth in the first quarter of 2017 will be depressed, with Kenyans being forced to spend more for basic necessities such as food and water.The governor said that the economy grew by 5.9 per cent last year, only slightly lower than the official government expectation of six per cent.“We are expecting growth of 5.7 per cent this year, taking into account the adverse effects of drought in the first quarter,” said the governor.“Macroeconomic stability in inflation, adequate reserves, additional investment in infrastructure and private sector investment and consumption will contribute to this growth. However, we face some headwinds, most significantly external shocks linked to policies of the new US administration and the Brexit negotiations.Dr Njoroge, however, played down the possible negative effects on the economy of the general election slated for August, terming it a cyclical event that will be outlasted by longer term fundamentals of the economy.On the risk coming from the US, the governor said that Kenya may not have enough of a buffer to cover against a move by the US to cut Kenyan imports as part of a protectionist policy.Exports to the US account for 5.3 per cent of Kenya’s total exports, with more than 90 per cent of goods sold to the US consisting of apparel under the Agoa pact.He also cited the risk to Kenya’s and global financial markets should the US go ahead and deregulate its financial sector as promised by President Trump.

 

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