Allianz Trade, a global organisation operating in Paris, on Thursday revealed the factors affecting Kenya's economic growth in 2024.
In a statement, the company noted that Kenya's Gross Domestic Product (GDP) is expected to continue growing by above 5 per cent in 2024.
"Kenya's real GDP is expected to continue growing slightly above 5 per cent in 2024 in line with the performance of 2023, which saw a stronger growth end of the year driven by agriculture, tourism (tourist arrivals increased by +31 per cent) and services as a whole," read part of the statement.
However, the the company noted that a few factors may derail this growth. These factors include the rising global food and energy prices, and regional peculiarities which affect the country's inflation.
On regional peculiarities, the company explained this was seen in the limited infrastructure. limited purchasing power and supply dependencies.
"This cycle is expected to continue into 2024, although inflation is predicted to gradually moderate," read part of the statement.
According to the company, Kenya's increasing inflation was widening the gaps among the population. In January data from the Kenya Bureau of Statistics (KNBS) indicated that the inflation stood at 6.9 per cent up from 6.6 per cent in December 2023.
Another obstacle pointed out by Allianz Trade was the public debt sustainability. This is among the issues President William Ruto is attempting to resolve.
The fifth review conducted by the International Monetary Fund (IMF) indicated that Kenya's public was sustainable.
" While overall and external ratings for risk of debt distress remain high, debt dynamics are being bolstered by the fiscal consolidation under the IMF-supported program," read part of the review.
Meanwhile, Allianz Trade also revealed that the political scene in the country was among the risk factors which are likely to affect the economy. Some of these political risks were not only from internal factors but also external.
"Kenya’s systemic political risk is elevated. This reflects political and social tensions stemming from social inequality and corruption, as well as security risks, including cross-border spillovers from the ongoing conflict in Sudan and latent tensions in Ethiopia and Somalia," the company added.
