Kenya Macroeconomic Outlook, 2027

Kenya Macroeconomic Outlook, 2027

Manufacturing Impetus, Affordable Housing Push, and Business-Friendly Policies to Augment Medium-Term Growth Potential

RELEASE DATE
19-Jul-2022
REGION
Africa
Deliverable Type
Economic and Databases
Research Code: 9AE5-00-40-00-00
SKU: CI00817-AF-MT_26730
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Description

Spared of widespread coronavirus outbreaks, the Kenyan economy reported a small economic contraction in 2020 as robust growth across agriculture, financial services, real estate, and construction largely offset the sharp decline in hospitality, tourism, and transport services. The economy registered an impressive rebound in 2021, led by the broad-based recovery in the manufacturing, transport, ICT, and hospitality sectors. Despite limited direct economic linkages with Russia and Central Asia in the wake of the Russo-Ukrainian war, the country’s 2022 GDP growth faces increased headwinds in the form of soaring energy and food prices, monetary tightening, and a deteriorating fiscal position due to a mounting subsidy bill and rising debt repayment costs. Against this backdrop, how will the Kenyan economy fare in 2022 and beyond? Can business-friendly reforms, infrastructure investments, and manufacturing incentives transform Kenya into a regional trade hub in East Africa over the medium term?

This research provides an overview of Kenya’s shifting demographic and economic landscape until 2027, supported by policy measures to roll out universal healthcare, create affordable housing, and drive manufacturing growth. It examines Kenya’s economic resilience to withstand growing global headwinds by charting the impact on its GDP growth trajectory and inflation trends. In particular, the study offers insights into price pressures, supply disruptions, and interest rate movements that can help businesses undertake important sourcing and costing decisions.

This study also delineates the impact of transformative global events, including the Russo-Ukrainian war, adoption of climate-conscious policies, and ceasefire in the Tigray conflict in neighboring Ethiopia on the Kenyan economy. By analyzing Kenya’s performance on key global indices, this economic outlook highlights Kenya’s growing attractiveness as an investment hub, especially in comparison to similar economies in East Africa. The report also identifies growth opportunities arising from a confluence of policy pivots and global economic disruptions, as well as the key strategic imperatives for businesses to minimize the impact of input shortages and currency depreciation in the short term.

Key Issues Addressed

  • What is Kenya’s GDP growth outlook over the next 5 years?
  • Will the rapid tightening of global financial conditions result in more policy rate hikes in 2022 and beyond?
  • How will higher food and fuel prices impact the inflation outlook in 2022 and beyond?
  • How is Kenya adapting to upending global geopolitical disruptions such as the Russo-Ukrainian war and the Ethiopian Tigray war?
  • How will Kenya’s population structure evolve over the next 5 years?
  • Which sectors are poised for growth supported by medium-term policy priorities to drive economic growth?
  • How will fiscal policy evolve in light of the growing external public debt repayment burden and mounting subsidy bill?
  • Which factors support Kenya’s growing attractiveness as a regional manufacturing and export hub amid the growing imperative to diversify supply chains?
  • How does Kenya fare on global innovation and competitiveness indices compared with other regional economies?

Author: Neha Anna Thomas

Table of Contents

Why Is It Increasingly Difficult to Grow?

The Strategic Imperative 8™

The Impact of the Top 3 Strategic Imperatives on the Kenyan Economy

Growth Opportunities Fuel the Growth Pipeline Engine™

Key Economic Metrics

Growth Drivers

Growth Restraints

Population Structure

Population Size and Density

Health Insurance and Out-of-Pocket (OOP) Expenditure

GDP Growth

East African Community (EAC)—GDP Per Capita

Inflation and Monetary Policy Outlook

Fiscal Analysis

Trade Analysis

Impact of Global Economic Trends and Events

Positioning on Global Performance Indices

Growth Opportunity—Universal Healthcare Push will Drive Demand for Medical Services and Equipment

Growth Opportunity—Universal Healthcare Push will Drive Demand for Medical Services and Equipment (continued)

List of Exhibits

Legal Disclaimer

Spared of widespread coronavirus outbreaks, the Kenyan economy reported a small economic contraction in 2020 as robust growth across agriculture, financial services, real estate, and construction largely offset the sharp decline in hospitality, tourism, and transport services. The economy registered an impressive rebound in 2021, led by the broad-based recovery in the manufacturing, transport, ICT, and hospitality sectors. Despite limited direct economic linkages with Russia and Central Asia in the wake of the Russo-Ukrainian war, the country’s 2022 GDP growth faces increased headwinds in the form of soaring energy and food prices, monetary tightening, and a deteriorating fiscal position due to a mounting subsidy bill and rising debt repayment costs. Against this backdrop, how will the Kenyan economy fare in 2022 and beyond Can business-friendly reforms, infrastructure investments, and manufacturing incentives transform Kenya into a regional trade hub in East Africa over the medium term This research provides an overview of Kenya’s shifting demographic and economic landscape until 2027, supported by policy measures to roll out universal healthcare, create affordable housing, and drive manufacturing growth. It examines Kenya’s economic resilience to withstand growing global headwinds by charting the impact on its GDP growth trajectory and inflation trends. In particular, the study offers insights into price pressures, supply disruptions, and interest rate movements that can help businesses undertake important sourcing and costing decisions. This study also delineates the impact of transformative global events, including the Russo-Ukrainian war, adoption of climate-conscious policies, and ceasefire in the Tigray conflict in neighboring Ethiopia on the Kenyan economy. By analyzing Kenya’s performance on key global indices, this economic outlook highlights Kenya’s growing attractiveness as an investment hub, especially in comparison to similar economies in East Africa. The report also identifies growth opportunities arising from a confluence of policy pivots and global economic disruptions, as well as the key strategic imperatives for businesses to minimize the impact of input shortages and currency depreciation in the short term.--BEGIN PROMO--

Key Issues Addressed

  • What is Kenya’s GDP growth outlook over the next 5 years
  • Will the rapid tightening of global financial conditions result in more policy rate hikes in 2022 and beyond
  • How will higher food and fuel prices impact the inflation outlook in 2022 and beyond
  • How is Kenya adapting to upending global geopolitical disruptions such as the Russo-Ukrainian war and the Ethiopian Tigray war
  • How will Kenya’s population structure evolve over the next 5 years
  • Which sectors are poised for growth supported by medium-term policy priorities to drive economic growth
  • How will fiscal policy evolve in light of the growing external public debt repayment burden and mounting subsidy bill
  • Which factors support Kenya’s growing attractiveness as a regional manufacturing and export hub amid the growing imperative to diversify supply chains
  • How does Kenya fare on global innovation and competitiveness indices compared with other regional economies

Author: Neha Anna Thomas

More Information
Deliverable Type Economic and Databases
Author Sailee Sakhardande
Industries Cross Industries
No Index No
Is Prebook No
Podcast No
WIP Number 9AE5-00-40-00-00