Treasury sees 2020 economic growth at its slowest since 2008 post-election violence
The National Treasury has revised its 2020 economic growth estimate to a range of 1.8 percent to 2.5 percent.
The expected decline in growth is attributed to the Covid-19 pandemic-led disruptions to economic activity.
“Our GDP projection for the year is 2.5 percent however if the pandemic persists we see growth contracting further to 1.8 percent,” Treasury Cabinet Secretary Ukur Yatani said on Tuesday.
The range of expected output would put Kenya’s economic growth at its slowest pace in 12 years since the fallout from the 2007 General Election which left the 2008 GDP growth at 0.23 percent.
According to the Treasury CS, the pandemic has brought commerce to its knees with recovery expected to take a long time in a worst case scenario.
“There is a serious slack in economic activity particularly in services sectors such as transport. This is expected to result in job and earnings losses,” he added.
The National Treasury reported it has since initiated a study to assess the impact of the pandemic on the economy with the survey set for launch in early May.
“The report is meant to establish the impact of the pandemic on both the household level of the economy and the general economy,” CS Yatani said.
Jitters on the State of the economy remained sustained with the global economy expected to enter into recession.
Kenya’s last recession stretches back to nearly three decades ago when output fell into negative territory in 1992.
According to the International Monetary Fund (IMF), Kenya might narrowly avoid the economic fallout having given a revised one percent GDP growth expectation earlier this month.
The ramifications of the Covid-19 pandemic have prompted the government to move to cushion it’s most vulnerable in the population through tax incentives and cash transfer programs.
On Saturday, President Uhuru Kenyatta assented to the 2020, Tax Laws (Amendment) Bill bringing relief to Kenyans including a 100 percent waiver on pay as you earn (PAYE) on employees salaried at less than Ksh.24,000 a month.
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