Njuguna Ndung'u: Economy showing signs of recovery but still fragile

Treasury CS Prof Njuguna Ndung’u. [Jonah Onyango, Standard]

Treasury CS Prof Njuguna Ndung’u says Kenya’s economy is showing signs of recovery, with the 2023 economic growth recorded at 5.6 per cent.

Inflation rates have seen a slight increase from 5 per cent in April to 5.1 per cent in May, which he noted is not substantial.

“The last quarter of 2023 marked the beginning of economic recovery,” said Prof Ndung’u in Nairobi ahead of the budget reading.

However, he expressed concern over the fragility of this recovery, citing the severe impacts of the Covid-19 pandemic in 2020, a historic drought in 2021-2022, and the recent El Niño phenomenon.

Continuing floods in 2024, supply constraints, and a global dollar shortage in 2022 have been described as persistent negative shocks that have undone two decades of progress in poverty reduction and inequality.

“There is strong evidence of economic recovery, but it is fragile and must be supported by robust policy reforms, programmes, and targeted interventions,” Prof Ndung’u explained.

He emphasised the need for a multifaceted approach to address the nation’s debt.

Ndung’u is set to present a Sh3.9 trillion budget for the fiscal year 2024/25, today, Thursday, June 13, which represents 21.8 per cent of the country’s GDP.

The budget includes significant tax changes proposed through the Finance Bill 2024.