Economic Survey 1978

The prices of coffee and tea have already fallen appreciably from the high level of 1977. Producers appear to be acting to try to ensure that the falls are not over prolonged or too drastic and present indications are that the average prices in 1978 will fall by about 30 per cent below the 1977 level. Also it is forecast that while there will be some increase in the production of tea in Kenya in 1978, that of coffee, due to adverse effects of excessive rain, will fall. However, apart from adverse effects on coffee production, the good rainfall in 1978, will help agriculture production. Growth in output of manufacting sector will also continue and there are signs of a large recovery in construction activity. The transport and communications sector too is anticipated to have a better year in 1978, as operations of the Kenyan corporations which have been set up to succeed the East African Community corporations became more effective, and benefit from the ripple effect ofa better level of confidence in the economy as a whole. It is forecast that the economy may register a growth rate of 5.5 to 6.5 per cent in GDP at constant prices in 1978.