Kenya’s economic growth forecast by the World Bank has been cut to 4.3% from 5% . world Bank has attributed this cut to the effects of high lending rates. High inflation and a weak shilling last year saw the Central Bank tighten the macroeconomic environment raising the Central Bank Rate from 6.25% in September 2011 to 18% in December 2011. This event helped in stabilizing the shilling.
[Read: Kenya Records Lowest Inflation Rate in 30 Months]
However, as predicted by the global institution, Kenya’s economy will recover in 2013 to grow at 5%; on the condition that the general election will be peaceful.
At the same time, recent statistics from the Kenya National Bureau of Statistics (KNBS) on gross domestic product (GDP) showed that the economic slowdown, that started in the first quarter of 2012, moved over again into the second quarter of this year. The report said that the economy expanded by 3.3% during the quarter under review compared to a growth of 3.5%, in the second quarter of 2011. Seasonally adjusted gross domestic product grew by 0.1% in the second quarter of 2012 after increasing by 0.5% in the first quarter.
[Read: Economic Slowdown Persists]