Country Forecast Kenya November 2012 Updater

Country Forecast Kenya November 2012 Updater

Overview

Kenyan politics will be dominated by the challenge of holding elections in March 2013 and implementing the new constitution. Devolution and a stronger legislature will curtail presidential powers after the ballot. Key contenders for the post are Raila Odinga, Uhuru Kenyatta and Musalia Mudavadi. There is some risk of election-related violence. Inflation is forecast to retreat from 9.4% in 2012 to 5.6% in 2013, and to move within the 4.5-6% range in 2014-17, helped by prudent monetary policy and more stable global prices; barring serious drought. The current-account deficit will edge down from an estimated 9.6% of GDP in 2012 to 8.2% of GDP in 2013. The gap will continue to narrow in 2014-17 helped by steady growth in earnings from exports, tourism and remittances.

Key changes from last month

Political outlook

The post-election government will remain committed to pro-market reforms, including deregulation, privatisation and trade liberalisation, but some will be delayed because of electoral and constitutional imperatives.

Economic policy outlook

The cabinet in September approved the construction of a new terminal and runway at Nairobi's international airport, although the project is running nine months behind schedule because of tendering disputes.

Economic forecast

The Economist Intelligence Unit expects real GDP growth to quicken from an estimated 4.5% in 2012 to 4.8% in 2013, helped by lower interest rates but held back by global fragility. Growth will accelerate in 2014-17, although structural constraints will persist.

Please Note: Due to the Nature of This Report The Toc is Not Available