IMF raises Kenya’s 2020 growth projection to 1 per cent

The International Monetary Fund (IMF) has raised Kenya’s 2020 growth forecast from a minus one per cent to one per cent in its latest global economic outlook update issued on Tuesday.

The new projection means Kenya is set to avoid falling into a recession- a period of economic contraction – as earlier predicted.

Kenya’s positive growth projection is largely attributable to a diversified economic base which means the country relies on no one sector for growth.

The country is set to be among the few to witness growth in 2020 in Sub-Saharan Africa (SSA) as the majority of territories fall into recession.

The IMF has revised SSA growth for the year downwards to -3 per cent will oil-exporting countries such as Nigeria and Angola marking an average -4.1 per cent contraction.

Middle-income countries in the region are expected to fall deeper into recession as economies contract by 5.1 per cent with South Africa seeing the sharpest contraction of them all at -8 per cent.

Closer home, Uganda is expected to slide into recession with annual growth expected at -0.3 per cent while Ethiopia and Tanzania lead the way in marking resilience with their growth expected to come in at a par 1.9 per cent.

Overall, the global economy is expected to stay in recession with growth expected at -4.4 per cent, a less severe contraction than issued in June 2020.

The new projection by the IMF on Kenya mirrors similar sentiments from the World Bank which also sees the country’s GDP growth in positive territory based on its diversity.

Domestically, both the National Treasury and the Central Bank of Kenya (CBK) have raised the country’s GDP projection to 2.6 per cent and 3.1 per cent respectively anchoring optimism on the wide economic base.