Kenya’s Central Bank says the country’s agricultural and tourism sectors are likely to enhance economic growth in 2018.
The Central Bank’s Governor, Patrick Njoroge who made this known at a news conference in Nairobi said the forecast was based on the economy’s performance in the first quarter.
According to him, the East African economy expanded by 5.7 percent in the first quarter as farming, which accounts for close to a third of output, recovered from a drought in the same period a year earlier.
“The economy expanded by 4.9 percent in 2017. We have a very favourable outlook for the economy,” he said, adding however there were risks including an international trade war and a cap on commercial lending rates at home.
Njoroge said the economy would grow much faster if the cap, at 4 percentage points above the central bank rate, which stands at 9.0 percent, was repealed.
He also said the dispute over trade tariffs between the United States and countries like China posed a significant risk to the growth outlook.
“The trade wars have started but they are still in round one… we hope that the war will cease quickly because there won’t be any winners in trade wars, everybody loses,” Njoroge said.
He attributed the forecast to a strong performance in farm exports like tea and cut flowers, amid falling imports.
It would be recalled that Kenya’s imports shot up last year due to the drought which forced increased amounts of food imports.