Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


IMF: Kenya's new economic numbers show reforms are working

02 October 2014, 12:10

Nairobi - An upward revision of Kenya's economic output shows that the country's economic reforms are paying off, with the potential for future growth to exceed 6 percent a year, an International Monetary Fund (IMF) official said on Wednesday.

Kenya announced on Tuesday that last year's gross domestic product was $53.4 billion - 25 percent higher than previously stated - after updating the base year for its calculation. Growth for 2013 was revised up to 5.7 percent from 4.7 percent.

Armando Morales, the IMF representative in Nairobi, said the new numbers ended the puzzle of why economic reforms in recent years were not being reflected in more robust growth numbers.

"Now we have found confirmation that, using better statistics, these reforms have been translating to growth," he told Reuters. "Our perception was of a booming economy; an economy ready for take-off."

Previous figures had consistently underestimated the growth rate, in spite of reforms including a review of taxes to boost revenue, a tightening of banking and capital market regulations to cut risk, improvement in the management of public finances and general economic governance.

Morales, however, said the Kenyan economy still faces challenges, particularly after a spate of militant attacks over the past year that have dented the tourist trade, a major source of hard currency.

The Washington-based fund is likely to lower its 2014 growth forecast of 5.5-6 percent to closer to 5 percent, Morales said, after the Kenyan government revised its forecast to 5.3-5.5 percent from 5.8 percent after the rebasing exercise.

Also read: Rwanda above Kenya as most competitive economy

But Morales said Kenya could push growth above 6 percent if it can be more consistent on economic policy, referring to interest rates decisions that resulted in high inflation and currency weakness in recent years.

An IMF team will visit Nairobi this month to discuss the government's request for an "insurance-type" lending facility to cushion against unforeseen shocks such as weather-related problems for the farming industry.

Morales said the rebasing exercise made it easer to "fine tune" a new programme because it offered a more accurate picture of the economy, but added that inflation needs to be watched closely to ensure it does not stray too far from the mid-point of the government's 2.5-7.5 percent target range.

"We would like to see how the pattern evolves over the next three months," he said.

- Reuters


Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Submitted by
Wilon Ochieng
Labour Party to dump both Jubilee...

The Labour Party of Kenya is likely to avoid supportoing both the CORD and Jubilee factions during the 2017 General Elections. Read more...

Submitted by
William Korir
Ukambani MP quits Jubilee, to run...

An Ukambani MP has quit the Jubilee Party, citing voter apathy as his reason behind leaving the ruling coalition. Read more...

Submitted by
Victor Tinto
Government launches probe into Po...

The government has launched an inquiry into the circumstances that could have led to two National Police Service helicopter accidents in August and September this year. Read more...

Submitted by
Wilwon Ochieng
Deputy Governor's ally found with...

The EACC has recovered KES 2 million in fake currency from a close ally of Deputy Governor for Tharaka Nithi Eliud Mati. Read more...

Submitted by
William Korir
Mudavadi given permission to join...

Musalia Mudavadi has been ghranted permission by his party to join the CORD Coalition. Read more...

Submitted by
Victor Tinto
EACC officers raid Deputy Governo...

EACC officers raided the home of a Deputy Governor as theft case continues in court. Read more...