Kenya's GDP in Massive Decline

Panafrican News Agency (Dakar), 17 May 2001

Nairobi, Kenya - The Central Bank of Kenya (CBK) says that the country's economy slumped during the last one year.

In its monthly economic review CBK, citing provisional data from key economic indicators said Kenya's GDP declined by 0.4 per cent in the twelve months leading up to February 2001.

CBK attributed the decline to shortfalls in supply and increased costs, inefficient infrastructure and weaknesses in major operations of agricultural cooperative and other societies.

There was an all time low in all sectors, except in the trade, catering, transport, storage and communication sub-sectors, said the CBK.

CBK said inflation, however, declined in April 2001, easing to 3.6 per cent, from 3.9 per cent in March, with the underlying month-on-month inflation rising to 7.8 per cent from 7.1 per cent in the same period.

The CBK report also indicates that government over the first nine months of the 2000/2001 fiscal year registered a deficit spending 9.9 billion Kenyan shillings (1 US dollar = 78 Kshs).

Fiscal performance remained unchanged at a shortfall of 3.9 billion shillings.

Kenya's external debt increased in the first nine months of 2000/01 fiscal year from 395.7 billion shillings as at the end June 2000, to 402 billion shillings in March 2001.

CBK said the economy was nonetheless expected to gain momentum in the next few months, with growth forecast at about 2 per cent.

This, according to the bank, would be facilitated by the rebound in the agricultural sector following relatively favourable weather conditions and the positive impact of structural reforms underway.