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World Bank report on Kenya

06-19-2012 03:16 BJT

The Kenyan economy is expected to grow at 5 per cent this year, after recovering from last year's shocks. The latest World Bank economic report on Kenya however warns that the country remains vulnerable to domestic and global upheavals that could reduce the growth to 4.1 per cent.

The Bretton Woods institution calls the report walking on a Tight Rope. It points out that Kenya is out of balance, as its current account deficit has soared to levels close to 15 percent of the country's total wealth or GDP. The country is also exposed to external shocks such as a rise in the international price of crude.

This, coming against a background of a country gearing up for national elections makes it more complicated. The report however notes that Kenya's economy has stabilized following actions taken by the government at the end of the third quarter of 2011, which included raising interest rates to bring down inflation. Other highs include that Kenya's per capita income that has exceeded 800 US dollars for the first time.

This means that Kenyans have an opportunity to enjoy better standards of living, as the middle class grows. World Bank's country director for Kenya, Johannes Zutt, says that the government must keep running the economy on an even footing. The World Bank also highlights the strong growth of the East African Community, noting that this creates opportunities for Kenya to reduce its vulnerability to external shocks, through strengthening regional trade.



Editor:James |Source: CNTV

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