A brief on Kenyan economy as the year ends

 After recording an impressive growth rate of 4.0% in Q1 2009, the economy grew by 2.1% in Q2 2009 compared to 2.2% over a similar period last year. The slow down can be attributed to the adverse impact of drought,power rationing and elevated inflation.

The 2009/10 budget unveiled a fiscal package that is widely expected to cushion the country from globe external shocks and domestic challenges.This requires efficient implementation of planned  expenditure.The process could be dogged by political uncertainty  still revolving around the constitutional review process.

The monetary policy intervention measures instituted by Central Bank to bolster liquidity in the system has borne fruits.Increased money market, liquidity helped maintain a stable interest rate environment  enabling the government to meet it's borrowing requirements with ease whereas low rates should  encourage commercial banks to extend credit to  businesses and households. This does not appear to be happening . The banks remains in their cocoons preferring to invest in the "less-risk" the government papers. Increased private sector lending in critical for economical recovery.

The high inflation level continue to pose serious risks to economic recovery. High inflation has been fueled by supply side constraints driven by inadequate foods,fuel and energy due to the failing long rains.
All in all, the outlook for the economy in 2009 remains challenging due to vagaries of weather,high energy costs,the high inflationary environment and intermittent political noise.However,provided the country receives adequate rains,inflation eases,banks enhance credit extension and improved political environment, the GDP could rise above 4.5% in 2010. 



When i not thinking future enterprises,i am sleeping the future of our children,eating soccer,walking the talk and of course, fun....!