By James Anyanzwa
The Government will, today, announce economic performance data amid renewed wave of political shocks on an economy already hit hard by rising fuel prices.
Minister of State for Planning, National Development and Vision 2030 Wycliffe Oparanya is expected to unveil the economic performance for last year and economic projections for this year.
Academicians, economists, fund managers and market analysts are pessimistic about the results due to instability in the macroeconomic environment and civil unrest that erupted in North Africa and the Middle East during the period. High inflation, high interest rates and a weak and volatile shilling exchange rate marked last year, which had started on optimism.
The cost of doing business also went up, making planning and forecasting more difficult. “With slowing growth in most sectors, I expect last year’s Gross Domestic Product to come in at four per cent for 2011, a reduction in growth from the 5.6 per cent in 2010,” said Reginald Kadzutu, head of fund management at Amana Capital.
Kadzutu says the top five sectors of agriculture, transport and communication, wholesale and retail trade, manufacturing and education that contribute 60 per cent of the GDP, are all expected to slow down.
“Growth will range between four to 4.5 per cent because the agricultural sector took a bit of a knock last year and that is the main cause for the drop,” said Edward Gitahi, Senior Investment Manager at PineBridge Investments.
“ I think we will report a bit of a slow down in economic growth. The rate at which economy is growing will be reduced to less than four per cent because we had major issues in the economy last year,” said Dr Jim MacFie, an academic and research director at Strathmore University.
According to MacFie, households basically had a problem in affording their day-today living because they had less money to spend and that obviously dampened demand in the economy.
“I don’t expect good figures to come from Oparanya because the figures of the economy slowed down in third and fourth quarter,” said Paul Mwai, chief executive of African Alliance Kenya Investment Bank.
