Kenya’s economy to rebound in 2021 due to vibrant private sector

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Kenya Market Update - 2nd Half 2019
Kenya Market Update - 2nd Half 2019

Kenya’s economy is expected to rebound in 2021 due to a vibrant private sector, economic experts said on Friday.

Gladys Makumi, financial advisory team leader of Deloitte East Africa, a consulting firm, told a virtual meeting that revamping of economic growth is based on the assumption that the government will curb potential spikes in COVID-19 cases in the short term.

The expected strong rebound in 2021 is due to Kenya’s vibrant private sector,” Makumi said during the Deloitte Kenya Budget 2020-21 Webinar Post-budget briefing.

She added that stronger agricultural output is also expected on account of favorable weather patterns.

“An increase in agricultural output should see a considerable increase in household disposable income and consequently a significant increase in private consumption,” she observed.

According to the analyst, Central Bank of Kenya’s targeted policy response measures will also support the resilience of the financial markets.

Makumi noted that the East African nation will, however, have to overcome a number of challenges brought about by government measures to curb the spread of COVID-19.

She said that a significant drop in tax revenue collection is expected in the current financial year that ends on June 30.

The expert noted that 1.6 million jobs in tourism and travel are at risk due to the closure of hotels and the shutdown of global aviation.

Makumi added that supply chain disruptions coupled with the impact of the locust invasion could also lead to a temporary increase in agricultural prices. Enditem

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