"IMF sees surprise upward revision of Kenya\u2019s economic growth"

" \n The\u00a0 International Monetary Fund \u00a0will revise East Africa\u2019s biggest economy\u2019s gross domestic product upwards this year from an earlier forecast for a contraction even after key Kenyan industries were hit by the Covid-19 pandemic. \n \n\n \n The change in outlook is supported by an improvement in several economic indicators and the lender now expects an \u201cupward revision\u201d of its June forecast for the economy to shrink by 0.3% in 2020, Tobias Rasmussen, the IMF\u2019s resident representative for Kenya, said Wednesday at a virtual investor conference organized by Renaissance Capital . The IMF will release an updated Word Economic Outlook report next month, he said. \n \n\n \n \u201cWe have seen an upturn in most activity indicators,\u201d Rasmussen said. \u201cLooking at the numbers coming out of Kenya it\u2019s fair to say that the outruns here have so far been better than what we at the IMF expected.\u201d \n \n\n \n Kenya\u2019s flower industry, the largest exporter of blooms to Europe, saw export earnings increase in the period through July, as did those of tea and fruit compared to last year, according to data from the statistics agency. \n \n\n \n Parliament\u2019s budget office has also revised its growth outlook to between 1% to 2% from an earlier forecast of -1.5% to 1% in April 2020, citing better than expected agricultural exports. \n \n\n \n Renaissance Capital forecasts Kenya\u2019s economy to grow at 1.5% in 2020 driven by superior agricultural yields because of good rains, according to Yvonne Mhango, sub-Saharan Africa economist at the investment bank. \n \n\n \n Kenya\u2019s economy remains resilient due to its diversification and low dependency on natural resources for export, Central Bank of Kenya Deputy Governor Sheila M\u2019Mbijjewe said at the webinar. \n \n\n \n \u201cThere are good signs of recovery, these are visible. These are all positive, but the uncertainty remains,\u201d she said. \n \n\n \n The country is in talks with the World Bank for a loan to provide further budget support after receiving $1 billion in May, which followed a $750 million package approved in 2019. \n \n\n \n The budget gap of East Africa\u2019s biggest economy is seen at 840.6 billion shillings ($7.8 billion) in the current fiscal year, or 7.5% of gross domestic product. \n \n\n \n Kenya, however, declined the G-20\u2019s offer on debt relief because it \u201cwould impact on existing commercial lending terms,\u201d M\u2019Mbijjewe said. \n \n\n \n Other highlights: \n \n\n \n Kenya\u00a0 collected \u00a047% of its domestic borrowing target in the first 2.5 months of this year which started in July, M\u2019Mbijjewe said. \n \n\n \n Note: Kenya\u2019s net domestic financing target for 2020-21 is 493.4 billion shillings, or 4.4% of GDP; according to June budget speech. \n \n\n \n Kenya\u2019s banking sector profitability levels expected to drop to 17% this year from 23% last year, M\u2019Mbijjewe said. \n \n\n \n Emerging and frontier markets, such as Kenya may benefit from cheaper borrowing as funds seek yields in these markets, according to Charles Robertson, global chief economist at Renaissance Capital. \n \n\n \n \n "

"IMF sees surprise upward revision of Kenya\u2019s economic growth"

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