Kenya’s economy gaining momentum despite virus effects, outlook however uncertain -CBK

NAIROBI, Kenya, June 27-Kenya’s economy has been bouncing back since May owing to increased exports in tea, flowers, vegetables despite the adverse effects the country has been facing owing to the outbreak of the coronavirus disease.

Central bank of Kenya Governor Patrick Njoroge says the economic indicators have reversed the expectations of the country’s GDP shrinking further where the virus has continued to disrupt normal ways of doing business.

“By all indications May the economy is bouncing back, the expectation that we were going to sink really much further, that has not been borne by reality or numbers,” Njoroge said during post MPC media briefing.

Last month, the committee however left the economy’s growth forecast for the year at 2.3 percent.

At the same time CBK noted that there was an increase in diaspora remittances sent home in the month of May as countries abroad eased restrictions due to COVID-19.

For instance, Kenyans living in South Africa sent home Sh24.4billion in May an increase from Sh22.1billion that they had sent in April.

However, the governor warned that the outlook remained uncertain noting that the pandemic needs to be controlled first before reopening of the economy.

“ We don’t want to be foolish to say that the worst is behind us, we need to be cautious, at the end of the day it is not GDP that matters, it’s the lives of people and that is what we should be focused on,” he added.

Banks have restructured loans worth Sh680 billion which is equivalent to 23.4 percent of the total banking sector loan book of Sh2.9 trillion.

The Monetary policy committee maintained its benchmark lending rate at 7.00 percent, citing that the policy measures adopted since the outbreak of the coronavirus disease were having the intended effect on the economy.

MPC first lowered the rate to 7 percent in April this year.