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The Central Bank of Kenya (CBK) has revised its economic growth forecast for 2023 downwards, citing a dim outlook for the country’s economy. The CBK’s Monetary Policy Committee (MPC) has projected that the country’s GDP will grow by 5.7% in 2023, down from an earlier projection of 6.1%. The MPC attributed the downward revision to various factors, including the impact of COVID-19 on the economy, the high debt levels, and the slow pace of structural reforms.
The CBK also noted that inflation is expected to remain within the government’s target range of 2.5% to 7.5% in the short to medium term. However, the bank warned that there were downside risks to inflation, including rising fuel prices and the ongoing drought, which could push up food prices.
Read: Government in talks with CBK to avert dollar shortage crisis
The downward revision of the growth forecast is likely to raise concerns about the country’s economic prospects, especially in light of the ongoing challenges posed by the COVID-19 pandemic. The government has been implementing various measures to mitigate the impact of the pandemic, including providing financial support to households and businesses, but the country’s economic recovery has been slow.
Overall, the CBK’s downward revision of the growth forecast underscores the need for the government to accelerate its efforts to implement structural reforms and address the underlying challenges facing the economy. The government must also continue to provide support to households and businesses to ensure that the economy recovers from the impact of the pandemic and returns to a path of sustainable growth.
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