KENYA’S ECONOMIC GROWTH IS EXPECTED AT 5.6% – 5.8%-REPORT

Cytonn Asset Managers has today released their 2020 Macroeconomic Outlook, projecting 2020 GDP Growth to come in at 5.6% to 5.8%, inflation to average 5.2% for the year and the Kenya Shilling to remain stable and range-bound, between Kshs 101.0 and Kshs 104.0. Cytonn Asset Managers remains positive on the equities market performance in 2019, driven by higher growth in corporate earnings, while advising investors to remain biased to short-term fixed income instruments given the possible upward pressure on interest rates as the Kenyan Government manages debt sustainability.

“For the Kenyan economy, our outlook for 2020 is NEUTRAL on GDP Growth. We project economic growth to come in at 5.6% – 5.8% in 2020, supported by the improved private sector credit growth, and expectations of a recovery of the agriculture sector,” said David Gitau, Investment Analyst at Cytonn. “The government’s strategy around fiscal consolidation, in an effort to reduce the fiscal deficit, may affect economic growth, due to reduced government spending and existing concerns on the sustainability of growth in some of the major sectors, which recorded subdued performance in 2019. Key risks to growth remain worries about Kenya’s debt sustainability, and the revenue collection capacity by the Kenya Revenue Authority against its Budgetary targets” he added.

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