Dip in loan up­take to hurt Kenya’s 2017 growth, says of­fi­cial

The Star (Kenya) - - News Business -

REUTERS/ Kenya’s econ­omy is likely to ex­pand by just more than six per cent next year, down from an ini­tial fore­cast of 6.5 per cent a se­nior Trea­sury of­fi­cial has said. Geoffrey Mwau at­trib­uted this to slow­ing pri­vate-sec­tor credit growth. Pri­vate-sec­tor credit grew just 7.1 per cent in July from 17.8 per cent in De­cem­ber of last year, the Cen­tral Bank said in Septem­ber. That is well be­low what the CBK says is ideal credit growth of 12 to 15 per cent. The con­trac­tion in July was be­fore a cap on com­mer­cial lend­ing rates im­posed by the gov­ern­ment in Septem­ber, a move that is ex­pected to fur­ther shrink credit lev­els. “We have mod­er­ated our growth (fore­cast) in 2017 to slightly over six per cent. Be­fore we were very op­ti­mistic it would get to 6.5 per cent,” Mwau, the di­rec­tor gen­eral of fis­cal and eco­nomic af­fairs, told Reuters. “We don’t see credit growth af­fect­ing growth es­pe­cially for 2016.” Most of the eco­nomic growth mo­men­tum was driven by pub­lic- sec­tor in­vest­ment, he said. “Pub­lic in­vest­ment is not re­ally re­lated to credit. Growth is also sup­ported by farm­ing and tourism. ”

Newspapers in English

Newspapers from Kenya

© PressReader. All rights reserved.