The Government is confident the economy will recover next year after a gloomy performance following the effect of the prolonged drought and political anxiety that engulfed the country this year.
National Treasury Cabinet Secretary Henry Rotich said yesterday the economy will withstand the current shocks and register growth even as revenue collections for the July-October period of the current financial year (2017/18) have fallen short by Sh40 billion.
“We estimate the country has lost one per cent of the Gross Domestic Product during the campaign period, an equivalent of between Sh120 billion and Sh130 billion in actual figures. This is evident in the revised growth outlook for the rest of the year,”he told a news conference in Nairobi.
In 2018, Rotich said economic growth is forecast to rise to more than six per cent and move towards seven per cent but trimmed this year’s forecast to five per cent from a previous projection of 5.5 per cent, which itself was a reduction from an earlier prediction of 5.9 per cent owing to effects of drought and erratic rainfall in April and May this year.
“We are forecasting economic growth to steadily grow at between five per cent and 5.1 per cent for the remainder of 2017 in view of the prevailing economic conditions in the country and in defiance of the poll jitters that have characterised the sector for the last four months,” he said. He said agriculture, that contributes 25 per cent to the Gross Domestic Product, is expected to record high growth next year, an indication jobs and investments lost this year will be recovered.
“Agricultural production this year will be better than last year, this is the reason why our growth looks optimistic, even at this time when we face these challenges on the investment side,” Rotich told a news conference in Nairobi.
He said the Government is considering engaging investors in the international capital markets as an option of meeting demands to fund infrastructure projects and to mitigate the loss the country has experienced over the electioneering adding that the conversation was still at a very early stage.
Speaking at the same occasion, Industry, Trade and Cooperatives Cabinet Secretary Adan Mohammed expressed confidence that international trade would pick up immediately the campaign period is over, a move that will further boost economic growth through the trickle-down effect that will result from new businesses setting up in the country.
“We are aware of companies that have had investment programmes in the pipeline to come and invest in Kenya. There are a number of firms that have been coming in and continuing with their developments but we are not aware of any company that has closed shop during the polls period,” Adan said. Additional reporting by Reuters