Barclays Africa yesterday launched its 2017/18 Macroeconomic report which covered key issues affecting the economy from a country, regional and global level. The report offered key insights on issues likely to affect Sub-Saharan African economies while covering the issues likely to affect the Kenyan economy.
Barclays expects the Kenyan economy to rebound in 2018 citing political calm and improved weather prospects as key factors that will fuel this recovery. The report further sees agriculture and tourism sectors being resilient in the year while construction will likely slow in the year. Overall Barclays expects the Kenyan economy to grow by 5.5% in 2018 against the 4.6% witnessed in 2017.
Barclays also expects public debt to increase to 61% of GDP while the total GDP will grow to $83 Billion from $76.7 Billion in 2017. On Kenya’s credit rating, Barclays expects it to remain relatively stable this year. The report says ratings agencies are closely watching the fundamentals and cites S&P’s October review that actually upgraded the outlook from negative to stable. Moody’s had in the same month placed Kenya’s B1 long-term issuer rating on review for downgrade citing Persistent large primary deficits and high borrowing costs as well as Uncertainty over the direction of fiscal and economic policy, in part due to evolving political dynamics.
In Sub-Saharan Africa, Barclays expects an economic growth upwards of 5%. Among the risks likely to cause macroeconomic imbalances include political uncertainty with Kenya, Tanzania, Ethiopia and Zimbabwe seen as likely victims. Regarding policy strain, the economies of Angola, South Africa and Angola are seen as likely risky. Regarding exposure to the global environment, US policy uncertainty, Brexit and Africa trade, China’s adjustment and Commodity demand are seen as likely risks.
The report expected a modest acceleration of global economic growth in 2018 from the 3.7% witnessed in 2017. Among the key risks to the global economy cited included the uncertainty of the US policy catalysed by the Trump regime. Other issues include China’s ongoing adjustment as well as European politics ranging from Brexit deadlines, German coalition, Italian election and Catalonia in Spain.
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