“No I don’t think this was a surprise, this is what was widely expected, I think you’ve got certain factors playing against each other. When you look at the exchange rate, it’s been appreciating, inflation although it had a small spike - due to the VAT figure - seems to have settled down,” Paul Mwai, CEO, AIB Capital told CNBC Africa.
At the Monetary Policy Committee (MPC) meeting that was held on Tuesday, the central bank decided to continue to work with stakeholders to ensure better liquidity management.
“One of the things I didn’t see in their figures was the economic growth figures. We’ve got the second quarter of economic growth figures coming in at 4.3 per cent compared to 5.2 in the last quarter which indicates a slowdown in the economic growth,” he explained.
Mwai believes that due to the elections that were held earlier this year, the MPC may have dismissed the slowdown in economic growth.
“The critical thing that slowed down growth in the second quarter was tourism figures and I think we’ve now gone into the peak season for tourism and we expect those numbers to improve, so we expect an improvement in tourism which should in some way bump up the economy,” he said.
Kenya’s tourism sector suffered immensely as the Westgate Mall attacks left the country facing a decline in investor confidence and international investors which heavily supported the country's stock market. Nonetheless, the figures are meant to be back up as the peak season kicks off.
“Now that the worries in the US economy have somehow subsided, there is perhaps more encouragement that the global economy will continue to grow,” he added.
As investor participation in the country has been quite strong, Mwai is certain that good company earnings is a key factor in ensuring and sustaining the participation.