Economic Survey 2008

Economic growth for 2008 is likely to slow down due to the sluggish economic activities witnessed in the first quarter of the year associated to the 2007 post election skirmishes. Loss of capital, damage on the country’s image abroad, and business uncertainty that emanated from the violence are likely to impact negatively on the economy. In addition, unfavourable weather during the first quarter of 2008 coupled with disruption of agricultural activities by the post-election violence is expected to adversely affect agricultural output. Indicators in the first quarter of 2008 show escalation of inflation to levels only witnessed over a decade ago. The rise has been attributable not only to rise in oil prices but also on a general rise in food prices both domestically and globally. In addition, disruption of agricultural activities by the post-election crisis has also contributed significantly to the rise in food prices.