NSE market watch board at Nairobi securities Exchange in Nairobi. [Jonah Onyango/Standard] Business
Covid-19 has dashed all hopes of recovery this year after one of the worst economic slowdowns in recent history.
While 2020 is by all indications likely to be the worst year for the global economy in history in the wake of the coronavirus pandemic, 2019 will probably come a close second. For starters, the global real Gross Domestic Product (GDP) recorded a decelerated growth of 2.9 per cent last year compared to a growth of 3.5 per cent in 2018, according to new official figures. In Kenya, the real GDP is estimated to have expanded by 5.4 per cent in 2019, down from 6.3 per cent in 2018. The agriculture, forestry and the fishing sector, which contributes around 26 per cent to the GDP, registered one of the biggest declines from a six per cent growth in 2018 to 3.6 per cent last year. According to the Economic Survey 2020, this was attributable to the delay of the long rains and the fact that when the rains finally came, they were torrential and left a trail of destruction. Late in the year, a wave of locusts invaded the region, decimating crops in regions that were trying to recover from the ravages of drought. Any recovery hopes this year were dashed in the first quarter by the coronavirus pandemic. As such, estimates of the growth of the economy have had to be revised downwards, with economies globally suffering an unprecedented slowdown. However, in spite of the gloom of 2019, some positives were witnessed.
For instance, Gross National Income (GNI) grew by 9.1 per cent from Sh8.75 trillion in 2018 to Sh9.54 trillion last year. Similarly, Gross National Disposable Income (GNDI) grew by nine per cent to stand at Sh10.08 trillion in 2019. The GDP per capita, Kenya National Bureau of Statistics (KNBS) said in the report, increased from Sh191,789 in 2018 to Sh204,783 last year. In the financial sector, the Central Bank of Kenya (CBK) reviewed the Central Bank Rate (CBR) downwards from nine per cent in July 2018 to 8.5 per cent in November 2019. This led to an easing of monetary policy. Similarly, the capping of bank interest rates previously enshrined in section 33B of the 2016 Banking Act was repealed in November through the enactment of the Finance Act, 2019. All this was to give […]