Cytonn predicts 5.4pc growth in 2018
Kenya’s private equity investment company Cytonn Investments has projected a mild 5.4 percent economic growth rate for 2018.
This estimate has been backed by several factors key among them, the return to normalcy following the long and extended electioneering period in the backend of last year.
Speaking at Cytonn’s 2018 market outlook report, investment analyst Patrick Mumu expressed his confidence on the positive political climate outlook.
“We are positive, now that the elections are concluded business environment resumes or goes back to how it was preceding the election,” Mr. Mumu said.
Other factors attributed to the growth projection includes Central Bank’s protection of the domestic currency, sufficient foreign currency reserves, stable market prices for commodities and increased investor sentiment in the country.
Growth in agriculture, real estate, media, technology and ICT sectors will be the key driver of overall growth.
Despite the positive growth projection, Cytonn has raised several factors as limiters to the growth prospect.
The government’s failure to meet its borrowing and revenue collection targets are the major factors while others include limited private investments and uncertainties in inflation rates which currently stand at 8 percent.
The current political climate that has seen the censorship of three television stations in the country has been described as short-term shock which will in the end only affect the projected growth partially.
Speaking during the release of the report, Cytonn Investment analyst Caleb Mugendi said he expects a quick resolution to the matter.
“In the short-term, there might be a bit of hiccups here and there but we expect that towards the end of the year, that [it] will be resolved,” Mr. Mugendi said.
The IMF has projected a 3.4 percent growth rate for Africa in 2018.
Report by Kepha Muiruri
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