Posted on :Thursday , 7th January 2021
According to a report published by the World Bank on 5 January 2021, Kenya's economy will recover strongly after the global economic slowdown in 2020.
The Covid-19 pandemic resulted in significant revenue losses around the world, with Kenya's economy contracting by 1%, according to a survey by the Central Bank of Kenya.
The report predicts that the economy of Kenya will recover in 2021 by 6.9 percent and in 2022 by 5.7 percent. The World Bank has stated that Kenya is expected to witness the fastest economic growth in East Africa, with Rwanda coming second at 5.7% in 2021.
It is predicted that Tanzania will recover by 5.5%, Uganda by 2.8%, and Burundi by 2%. However, the study forecast the economy of South Sudan to contract 3.4 percent.
As a result of the pandemic, the World Bank has attributed the global downturn to lockdowns. The study claimed that Kenya, which earns a great deal of travel and tourism income, was primarily affected, but praised the country for its attempts to slow down the pandemic.
Inflation rates in the world were erratic in 2020, as persistently low demand helped to curb inflationary pressures.
The World Bank welcomed the measures taken by Kenya to recover from the economic difficulties of the pandemic, such as the implementation of new technologies. According to report, some policymakers have also been working to promote network extension and alleviate congestion, such as the introduction of emerging technologies- Google's Loon network in Kenya.
The World Bank has highlighted the difficulties of obtaining Covid-19 vaccinations, debt sustainability, natural disasters and stability as major risks to the economies of East Africa.
However, it warned against bad loans kept by banks in Kenya amounting to Ksh402.3 billion, as reported by CBK.
The country has made efforts for economic growth, with the national treasury abolishing tax relief as of 31 December 2020.