Kenya’s economy expanded at the fastest pace in 11 years in 2021, rebounding from a coronavirus-induced contraction the year before.
Gross domestic product grew 7.5%, after shrinking 0.3% in 2020, Macdonald Obudho, head of the nation’s statistics agency said Thursday in the capital Nairobi.
While East Africa’s largest economy grew at its fastest pace since 2010 last year, that’s unlikely to be sustained in 2022 because of foreign and domestic risks. A slowdown in global growth due to rising interest rates, Russia’s invasion of Ukraine and Covid-19 shutdowns in China is likely to weigh on capital inflows and demand for Kenya’s exports. The nation is the world’s top exporter of black tea and the largest supplier of cut flowers in Europe.
Rising fuel costs, supply shocks caused by the war in Ukraine, a persistent drought and weakened currency will also strain growth and fan inflation. Price growth surged to 6.5% in April and the shilling is trading at record lows. The International Monetary Fund sees growth slowing to 5.7% in 2022, while the Central Bank of Kenya projects expansion of 5.9%.