The World Bank has revised Kenya’s 2024 economic growth forecast to 4.7%, down from its previous projection of 5.3%, citing ongoing fiscal challenges and economic headwinds. The adjustment reflects concerns over the country’s public debt levels, inflationary pressures, and slow progress on key reforms.
In its latest report, the World Bank emphasized that Kenya faces significant hurdles in managing its fiscal deficit and public debt, which have been exacerbated by rising global commodity prices and the lingering effects of the COVID-19 pandemic. The government’s efforts to balance spending with revenue collection have not yielded the expected results, leading to financial instability.
Despite these challenges, the World Bank acknowledged Kenya’s resilience, noting strong performance in agriculture, infrastructure development, and the services sector. However, the bank warned that without urgent fiscal reforms, the country’s growth could be further constrained.
The report also highlighted the impact of global uncertainties, including fluctuations in oil prices and foreign investment trends, which have affected Kenya’s economic performance. While the country has made strides in digital innovation and technological growth, these sectors alone have not been enough to offset the broader fiscal issues.
Kenya’s government has committed to implementing economic reforms aimed at reducing the deficit, improving revenue collection, and attracting foreign investment. However, the path to recovery remains uncertain, with many experts calling for more decisive action to address the country’s debt challenges and foster long-term stability.
As the country navigates these complex issues, the World Bank’s revised growth forecast serves as a reminder of the difficult road ahead for Kenya’s economy in 2024 and beyond.
