Kenya predicts growth in econ
2005-02-28 19:43
Nairobi - Kenya's national bank on Monday predicted that the country's economy would make modest growth in 2005 despite widespread and scathing donor criticism of the government for failing to crack down on graft.
Despite the implications of the corruption furor, the Central Bank of Kenya (CBK) said it expected the economy to grow by about 3% this year, up from 2.4% in 2004, due mainly to expansion in the agricultural sector.
"Agriculture is expected to expand rapidly on the back of a drought year, provided that the long rains in April 2005 and the short rains in October-November are adequate," CBK governor Andrew Mullei said in a statement.
Last year, prolonged drought and widespread crop failure forced President Mwai Kibaki and United Nations to appeal for nearly $100m in assistance, a move that badly hit the economy.
In addition, CBK said the economy this year could count on another strong performance by Kenya's tourism sector which earned $538m (€406m) in 2004, a 66% increase from 2003.
CBK also predicted that inflation, now pegged at nearly 15%, would drop into the single digits during the course 2005 and hover at about five percent by December.
Mullei's statement was issued as Kibaki's government comes under increasing pressure to clamp down on widespread corruption which has alarmed investors and donors and led to the suspension of millions of dollars in US and German anti-graft funding.
- SAPA