ELEC­TIONS COULD WORSEN THE RATE OF IN­FLA­TION

The Star (Kenya) - - News Business -

World Bank said growth prospects could also be cur­tailed by a de­lay in fis­cal con­sol­i­da­tion. This is be­cause elec­tion-re­lated spend­ing and in­creased govern­ment spend may crowd out pri­vate sec­tor in­vest­ments and lead to over­heat­ing of the econ­omy re­sult­ing in high in­fla­tion. Ex­ter­nally, the coun­try’s econ­omy may weaken due to weaker growth in global econ­omy, a spike in oil prices and in­creased volatil­ity in the global econ­omy. “To sus­tain Kenya’s growth mo­men­tum over the medium term, it will be im­por­tant to man­age risks that may arise,” Jane Kiringai, World Bank’s se­nior econ­o­mist said. The pos­i­tive growth trend, how­ever, is in line with the World Bank Group’s latest Ease of Do­ing Busi­ness Re­port, which pegged Kenya as a top global im­prover for two con­sec­u­tive years. Kenya moved up to the 92nd spot from 113 in the pre­vi­ous year and is among the top five economies in Sub-Sa­ha­ran Africa.

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