The World Bank said on Thursday it had trimmed Kenya’s growth forecast for this year and 2016, saying east Africa’s biggest economy was facing headwinds from currency volatility and tighter monetary policy.
The World Bank put 2015 growth at 5.4 percent, lower than a previous estimate of 6 percent, and forecast the economy would expand 5.7 percent in 2016, down from 6.6 percent.
“These estimates … take into account more recent data on exchange rate, inflation, fiscal consolidation and balance of payments pressures,” the bank said in a report.
Kenya’s shilling has lost 14 percent against the dollar this year and interest rates have climbed by 300 basis points.
The World Bank said Kenya’s public debt, which went up 0.05 percent to 44.5 percent of gross national production in 2014/2015, remained “sustainable”.
The World Bank said Kenya remained on course to be one of Africa’s fastest growing economies despite a slight slowdown in economic expansion.
“We believe that the Kenyan economy remains solid,” John Randa, a senior World Bank economist, said in Nairobi.