Westgate likely to lower local GDP
27 November 2013, 09:33
Nairobi - 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.
– CAJ News