Economic-Survey 2012

Abstract

The country experienced depressed rainfall during First quarter of 2012. Many tea growing regions suffered severe frost that led to lower output of tea. Weather forecast by the Kenya Meteorological Department (KMD) indicates that the 2012 long rains are likely to delay. The forecast also suggests that the rains will be largely sufficient in major crop growing regions while arid and semi-arid lands will experience inadequate rainfall. In light of the developments in the First quarter, the weather forecast and assuming normal short rains, the country might experience a decline in agricultural output in 2012. Projections for Brent crude oil prices suggest that the international oil prices are likely to be lower than the 2010 levels. On the assumptions of lower oil and food prices, inflation is likely to slowdown in 2012. On the other hand, the country is currently experiencing high interest rates which if persistent might lead to constrained credit to the productive sector and therefore impact negatively on the economy