Economic Survey 2018

The global economic recovery experienced in 2017 is expected to continue more strongly in 2018. The recovery is likely to be broad based with growth in most developed and emerging market economies projected to accelerate in 2018. Similarly, growth of Sub-Saharan Africa is expected to improve significantly over the same period. The expectations are against expected favorable global financial conditions, strong world trade and improved business confidence. However, rising international oil prices could hamper economic growth in the non-oil producing countries in particular the developing economies. Moreover, there still exist some risks in the global financial systems that could negatively impact on developed and emerging market economies if they materialize. In Kenya, the expected political stability and favorable macroeconomic environment are likely to be conducive for acceleration in growth in 2018. The on-going investments in infrastructure, improved business confidence, and strong private consumption are likely to support growth in 2018. Weather forecast points to a possibility of sufficient and well spread long rains in 2018 which is likely to be a major boost for activities in agriculture and electricity and water supply sectors. This will in turn be favorable for the manufacturing sector. However, rising oil prices and slow credit uptake by the private sector are likely to dampen growth in 2018. Inflation is expected to ease in 2018 supported by lower food prices due to improved agricultural output.