This article was originally published at: https://peresdaily.com/kenyan-economy-a-tale-of-resilience-and-challenges/
Kenya‘s economy experienced a slower growth rate of 4.8% in 2022, down from 7.6% in 2021. This decline has been attributed to the contraction in agriculture and decelerated growth across most sectors. The Kenya National Bureau of Statistics reported that the agriculture sector contracted by -1.9% compared to -0.3% in 2021, with its contribution to GDP dropping from 22.4% to 21.2%.
Impact of Drought and Inflation
The worst drought in four decades has led to a surge in food prices, impacting the daily lives of Kenyan families. Food prices account for nearly a third of the shopping basket for Kenyan families, exacerbating the effects of inflation. The country’s inflation rate stood at 9.9% in March, with rising food and fuel prices being the primary drivers.
Tourism Sector Showing Signs of Recovery
Despite the challenges faced by the agriculture sector, the tourism industry in Kenya has shown signs of improvement. Visitor arrivals increased to 1.54 million in 2022, although still below pre-pandemic levels. This improvement in tourism is expected to bolster the economy moving forward.
Economic Resilience and Challenges in 2023
The Kenya National Bureau of Statistics anticipates a resilient performance for the economy in 2023, supported by a robust services sector and the expected recovery in agriculture. However, high inflation and interest rates are expected to hamper growth by suppressing domestic demand. The weakening of the Kenyan shilling against the US dollar is also likely to make imports expensive and slow trade with the rest of the world.
This article was originally published at: https://peresdaily.com/kenyan-economy-a-tale-of-resilience-and-challenges/
