| dc.description.abstract | The Kenyan economy rebounded
solidly in 2021 due to improved
performance of the services sector
and industry, and the re-opening of
the economy in the post-COVID-19 period.
In 2022, the recovery momentum was,
however, disrupted internally by a prolonged
drought, which suppressed performance of
the agricultural sector, and externally by the
spillover effects of the Russia - Ukraine war
and the tight global financial markets that
saw sustained strengthening of the dollar
and high interest rates. In 2022, the economy
grew by 4.8 per cent compared to 7.6 per cent
in 2021. The average growth of the services
sector was 7.0 per cent compared to 10.0 per
cent in 2021 while the industry sector grew
by 3.9 per cent compared to 7.5 per cent in
2021. The agricultural sector contracted by
1.6 per cent in 2022 compared to an average
growth of 0.2 per cent in 2021. Inflation rates
crossed the government upper target band
of 7.5 per cent, resulting to high cost of living.
Previously, inflation rates breached the target
band mainly because of drought condition
which adversely affected the availability and
cost of food. Inflation rates averaged 7.7 per
cent in 2022 compared to 6.1 per cent in
2021. The Central Bank of Kenya tightened
monetary policy stance by cumulatively
increasing the policy rate by 1.75 percentage
points to 8.75 per cent in February 2023.
The government sustained its commitment
to the fiscal consolidation path, with fiscal
deficit accounting for 3.5 per cent of GDP for
the first three quarters of 2022/23 compared
to 4.1 per cent in the same period in 2021/22. However, government revenue and grants
for the first three quarters of 2022/23 was
11.7 per cent of GDP against a target of 12.3
per cent of GDP, while expenditures were
15.2 per cent of GDP against a target of 16.1
per cent | en |
