Thursday, November 28, 2013
A LEADING international economic think-tank projected the country's
gross domestic product (GDP) to be lower than government projections as a
result of the recent Westgate Mall terror attacks.
The forecast by Rand Merchant Bank (RMB) Global Markets come on the
back of the Treasury expecting 2014 GDP growth to come in at 6.1 percent
after 5.6 percent in 2013 due to good weather supporting the
all-important agricultural sector and strong economic growth in the
region to help boost exports.
“While we remain constructive on Kenya's long-term prospects, we are
wary of the potential near-term implications of the Westgate attack on
economic output and as such have revised our year-end GDP growth
forecast slightly lower to 5.2 percent,” RMB Global Markets stated.
The Westgate Mall terror attacks occurred in September when Somalia's
al-Queda linked Al Shabaab insurgents laid siege on the upmarket
shopping centre.
About 70 people were killed during the onslaught that was condemned worldwide.
Meanwhile RMB pointed out that in its latest Budget Outlook Paper,
the Ministry of Finance said the government was still concerned with the
current account deficit which is over 10 percent but expected declining
oil prices to take pressure off and narrow to 7 percent over the medium
term.
The budget deficit for the fiscal year 2014/15 is expected to decline
to 5.8 percent of GDP from this year's deficit of 7.9 percent while
inflation should become stable around the medium term target of 5
percent.