FORECAST: Despite Treasury’s optimism, analysts say GDP growth is unlikely to hit six per cent in 2020 Last year might go down as among the worst the Kenyan economy has experienced in recent past. When the National Treasury publishes the numbers for 2019 in a few months, few will be shocked by the fact that economic growth last year will only have slightly outperformed 2017 – which was equally bad. The economy is projected to have grown at between 5.4 and 5.6 per cent in 2019, better than what was witnessed in 2017, but the latter year having had to contend with the high-pitched political noise that culminated in the General Election in August and a repeat presidential election in October. Data collated from different government agencies shows how badly the economy was hurting last year, explaining the high number of job losses, a string of profit warnings and the Kenya Revenue Authority missing its tax collection targets in the half year to December. According to the quarterly economic reports by the Kenya National Bureau of Statistics (KNBS), nearly all economic sectors reported slower growth while some posted negative growth. In an update on Tuesday, Treasury said KRA missed its half-year tax collection target by Sh88.3 billion, netting Sh857.8 billion over the period to December. KRA failed to hit the target for all the tax categories, with the biggest miss registered under income tax. KNBS data shows that aside from construction and tourism, all other sectors posted a slowdown over the nine months to September compared to a similar period in 2018. Construction was driven by investments in infrastructure by the government as opposed to the real estate sector, which too suffered different challenges including difficulties in accessing credit. The standard gauge railway’s phase 2A was among the key infrastructure projects and it was at the centre of the sector’s growth. Even then, growth over the three quarters was only marginally higher (at 6.5 per cent) than in 2018 (6.3 per cent). Other key sectors to the economy including agriculture and manufacturing suffered. A mix of factors that ranged from poor rainfall over the March – May long rains season as well as turmoil in key export markets for Kenyan products such as tea and cut flowers contributed to the poor growth. These include the UK that is in the process of exiting the European Union, Iran that has […]
How key sectors dragged down economy in 2019
FORECAST: Despite Treasury’s optimism, analysts say GDP growth is unlikely to hit six per cent in 2020 Last year might go down as among the worst the Kenyan economy has experienced in recent past. When the National Treasury publishes the numbers for 2019 in a few months, few will be shocked by the fact that economic growth last year will only have slightly outperformed 2017 – which was equally bad. The economy is projected to have grown at between 5.4 and 5.6 per cent in 2019, better than what was witnessed in 2017, but the latter year having had to contend with the high-pitched political noise that culminated in the General Election in August and a repeat presidential election in October. Data collated from different government agencies shows how badly the economy was hurting last year, explaining the high number of job losses, a string of profit warnings and the Kenya Revenue Authority missing its tax collection targets in the half year to December. According to the quarterly economic reports by the Kenya National Bureau of Statistics (KNBS), nearly all economic sectors reported slower growth while some posted negative growth. In an update on Tuesday, Treasury said KRA missed its half-year tax collection target by Sh88.3 billion, netting Sh857.8 billion over the period to December. KRA failed to hit the target for all the tax categories, with the biggest miss registered under income tax. KNBS data shows that aside from construction and tourism, all other sectors posted a slowdown over the nine months to September compared to a similar period in 2018. Construction was driven by investments in infrastructure by the government as opposed to the real estate sector, which too suffered different challenges including difficulties in accessing credit. The standard gauge railway’s phase 2A was among the key infrastructure projects and it was at the centre of the sector’s growth. Even then, growth over the three quarters was only marginally higher (at 6.5 per cent) than in 2018 (6.3 per cent). Other key sectors to the economy including agriculture and manufacturing suffered. A mix of factors that ranged from poor rainfall over the March – May long rains season as well as turmoil in key export markets for Kenyan products such as tea and cut flowers contributed to the poor growth. These include the UK that is in the process of exiting the European Union, Iran that has […]
