Economic Survey 1983

Abstract

There are glimmers of a recovery in the world economy during 1983 and 1984. Lower inflation and interest rates, more buoyant demand, lower crude petroleum prices and improving business confidence are expected to spark at least a minimum revival of activity in the industrialized countries. The demand for commodity exports from developing countries is likewise set to grow accompanied by a possible modest improvement in the terms of trade. However, the lag between an upturn in the economies of developed countries and the beneficial impact on developing countries means that the year 1983 will remain a difficult one for Kenya. The balance of payments continues to be the major development constraint in 1983. Even though the first quarter of 1983 saw an improvement in the foreign reserves position, this could only be achieved by foregoing the importation of essential inputs for industry. The IMF has extended an 18. month credit, the drawing of which will have a favorable impact on the economy. The inflow of private foreign capital, however, is unlikely to improve until the upturn in the economies of industrialized countries becomes more discernible.