Treasury disputes KEPSA economic loss estimates
The Kenyan economy is estimated to have lost one percent of the gross domestic product (GDP) in 2017, after a prolonged electioneering period, the National Treasury has said.
According to the Treasury, this translates to an economic loss of between Sh120 billion and Sh130 billion even as it finalizes a report on economic performance during the year.
The figure is in sharp contrast to that issued by the Kenya Private Sector Alliance (KEPSA), which had estimated that economy had lost over Sh700 billion in eight months.
Treasury Cabinet Secretary Henry Rotich on Tuesday said the estimates by the private sector lobby group would mean the economy was in deep recession arguing the impact on the economy was not as harsh.
“I really can’t speak of KEPSA’s numbers at this point because I need to see what assumptions they have made. To me that number translates to 10 percent of GDP which to me losing 10 percent of GDP in eight months means total collapse of the economy,” Mr Rotich said.
Kenya’s GDP is estimated at Sh7.4 trillion according to the International Monetary Fund (IMF).
The treasury echoed remarks by the Institute of Economic Affairs last week that suggested the number had been exaggerated.
Kenya has been an extended political environment with a repeat presidential election.
The effects of that also impacted the economy which had at the start of the year grappled with a prolonged drought.
the Treasury has revised growth estimates downwards to between 5 and 5.1 percent from an earlier projection of 6 percent.
Mr Rotich spoke as he addressed foreign media on the state of the Kenyan economy in an attempt to reassure foreign investors.
The Treasury boss added that the economy had withstood the shocks brought about by the elections urging investors to continue with their investment plans in Kenya.
“The fundamentals of the economy that we have built for the past 4 to 5 years continue to hold steady and that is why you see we continue to talk of growth being buoyant, and continue to preserve macroeconomic stability, it can happen in an environment where the fundamentals have been weakened,” he said.
At the same time the government has assured that no company has shut down as a result of the slow economic performance this year.
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