Kenya Economic Outlook
- Economic growth is estimated at 4.9% in 2013 and is projected to accelerate to 5.7% in 2014.
- Having witnessed drastic currency depreciation and rapid inflation in 2011, the economy experienced stability for both indicators in 2012 and 2013 with inflation dropping to a single digit. This stability is expected to continue in 2014.
- International Criminal Court proceedings against six Kenyans dominated the political scene in 2012 and 2013 and will likely be the focus again in 2014 as cases against three people continue.
Kenya’s economy continued to recover in 2013 from the slowdown experienced in 2011. Real GDP growth in the year accelerated to 5.2%, 4.3% and 4.6% in the first three quarters of 2013 primarily driven by financial intermediation, tourism, construction and agriculture.
Real GDP growth is estimated at 4.9% and 5.7% in 2013 and 2014 respectively. Similarly CPI inflation is expected to remain single digit over the same period. The economy’s short- to medium-term forecast is for sustained and rising growth based on: increased investor and business confidence in the wake of peaceful March 2013 elections; increased rainfall; a stable macroeconomic environment; lower, stable international oil prices; stability of the Kenya shilling; and reforms affecting security, governance and justice.
Political activity in 2013 mainly centred on trials at the International Criminal Court (ICC) and the general elections held on 4 March 2013. Trials of three Kenyans, including the president and his deputy, continued at the ICC in The Hague, The Netherlands. They are accused of committing crimes against humanity during the post-election crisis of 2008. The March 2013 elections saw intensive competition between two main coalitions seeking the presidency, various gubernatorial seats and seats in parliament and county assemblies. Eventually, the Jubilee Coalition led by Uhuru Kenyatta and William Ruto was declared the victor after a fierce legal challenge before the Supreme Court from the Cord coalition, led by former Prime Minister Raila Odinga and former Vice President Kalonzo Musyoka.
Kenya is integrated into a number of global value chains – e.g. floriculture, textiles, leather, manufacturing and tourism – but economic and social benefits have been limited due to insufficient or unsustainable linkages with other sectors.