Connect with us

Economy

Analysts identify key economic drivers

Among others, growth will be bolstered by a rebound in both public and private investments, says Genghis Capital

Published

on

Healthcare services are among he four key pillars of the government's growth agenda.

Kenya’s real GDP growth will stand between 5.25% – 5.75% in 2018 up from 4.70% in the first three quarters of 2017, according analysis by Genghis Capital. The  investment bank today releases its Genghis Playbook 2018, which shows growth will be bolstered by a rebound in both public and private investments, positive performance in the agricultural sector and continued recovery in service sectors.

More focus on food security, affordable housing, the manufacturing sector and universal affordable healthcare listed as key delivery pillars for the Jubilee administration in his second-term economic plan will positively contribute to the country’s economic growth added the Genghis Playbook 2018.

“The Playbook 2018 seeks to bridge the gap between our clients and our research material,” said Elizabeth Wangechi, Head of Research, Genghis Capital, during the Playbook launch. “We move away from the traditional valuation reports and run our own Kenyan notional equities and fixed income portfolios.”

Drawing on the latest research, analysis and evidence from the leading analysts, the Playbook 2018 further highlights the following key projections:

Global Economic Growth: Global economic growth in the year is forecast at 3.90% driven by uptick in activity and accommodative financial conditions. Headwinds to growth include protectionism, geopolitical tension and an accelerated pace of core inflation in advanced economies.

Inflation Outlook: The inflation outlook is mild inflationary pressure in first half period due to the base effect before ticking upwards in the second half.  Private Sector Credit Growth (PSCG) to remain stuck at current low levels of 2.0% – 4.0% in the year due to continued crowding-out effect.

Current account deficit: Current account deficit to further widen to 7.0% in 2018 due to the expected high external capital goods expenditure and feed-through from rebounding global oil prices.

Dollar vs shilling: Diaspora remittance, tourism earnings and the re-bound in exports to support the shilling between 102.00 and 104.00 level in 2018. The broad dollar strength due to US Fed interventions to pressure the local unit.

Fixed income outlook:

  • Secondary market turnover to trend higher; corporate bond segment to remain subdued.
  • More bond re-openings to meet development needs.
  • Maturity structures indicate refinancing risk; recommend longer-term bond issues to smoothen refinancing risk.
  • Banking sector liquidity dictate trading and T-Bill performance; setting up of central depository for horizontal repo will improve liquidity management.
  • Impact of interest rate law – Banks to continue crowding-out private sector. Expect yield curve to remain flat at the long-end.

READ ALSO: Residents turn Whatsapp group into Sacco

Business Today is the leading independent online business website in Kenya. Started in 2012 by a veteran business journalist, it has a huge following both in Kenya and abroad. It covers various business and related issues. Email editor at: editor@businesstoday.co.ke

Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News Updates

Education5 hours ago

100 schools join tree planting competition

In its fourth phase, they will compete in nurturing drought resistant Terminalia brownie, Senna siamea and Melia volkensi tree species in 0.5 acre...

Opinion5 hours ago

Unlock pension fund capital to address the housing shortage in Kenya

Pension funds in the Kenya have traditionally invested in property, equities and debt instruments but there has been agitation to...

NEWS6 hours ago

Why Balala cancelled Sh20m Shujaa sponsorship

CS says players embarrassed the country by concealing the name: Make It Kenya on their team jerseys, while playing in...

Opinion2 days ago

All-round approach will prevent tax offences and financial crimes

Kenya has become increasingly exposed to illicit products and counterfeit goods, hence the need to take an all-round approach towards...

Economy2 days ago

Kenya’s GDP to hit 5.7% despite debt burden

Despite a debt increase, Kenya’s GDP is expected to reach 5.7% up from 4.9% last year, according to ICAEW’s (the...

NEWS5 days ago

DPP seeks to withdraw forgery case in Sh500m Karen land suit

The Director of Public Prosecutions (DPP) has requested for withdrawal of the case against Guy Spencer Elms, the lawyer accused...

Politics5 days ago

Chebukati ‘out to fix Chiloba’

When Judge Stephen Radido delivered his ruling on Thursday setting aside IEBC chairman Wafula Chebukati’s decision to send the CEO,...

Health1 week ago

Pharmaceutical firm backs social investments in healthcare

Boehringer Ingelheim, one of the world’s leading pharmaceutical companies, and Ashoka, the world’s largest network of social entrepreneurs, have held...

Education1 week ago

MKU ranked among 10 best universities in Kenya

Four local private universities in top 10 ranking of universities in the country.

NEWS1 week ago

4 MultiChoice traders win trip to watch World Cup in Russia

They will have an experience of a lifetime touring Petersburg, the Vodka Museum and enjoy a private boat tour along...

Advertisement

Trending