Asset management firm, Britam has forecast an economic growth of 6% in 2016. According to the company’s Gross Domestic Product (GDP) outlook, inflation is likely to trend lower to 6%, attributed to stable food prices and lower energy costs.
The Kenya shilling is also expected to grow strongly against the dollar as interest rates stabilize. Kenyan economy across East Africa and the sub-Saharan Africa has in the recent past stabilised, a situation that Britam projects to continue until the electioneering period.
With Kenya being a net importer, Britam warns the government to ensure the country lives within its limits and means to maintain an impressive rate of economic growth and gradually develop into a middle income and further upper middle-income status.
“Kenya has achieved an impressive economic growth in recent years. The real GDP growth has consistently outpaced the average for sub-Saharan Africa over the past five years, mainly driven by strong performance in trade and real estate sectors,” said Mr Kaniu.
Britam says strong fiscal consolidation and reduction of deficits including checks on accumulation of national debt is critical in enabling the government to consolidate previous growth and set future deals.
Slow global economic growth, uncertainty in crude oil prices and supply side shocks are however threats to the economy in this year. This could nonetheless be countered by effective budget implementation and prudent fiscal and monetary policy, which generally plays a bigger role in the attainment of growth targets.
See also: Britam Asset Manager firms its bets on real estate
Meanwhile, Britam recorded a compounded annual growth of 47% in the last financial year to stand at Ksh90 billion last December and seeks to invest more in real estate and bank management which have ensured steady growth.
“Alongside Agriculture and trade, these four factors generate about half the country’s Gross Domestic Product: though this contribution has been reducing gradually, an indication of increased diversification of Kenya’s GDP,” Mr Kaniu added.
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