A survey by the Central Bank of Kenya (CBK) has indicated that reopening of the economy with the easing of restrictions after the COVID-19 closures and resumption of near-normal business by virtually all sectors are expected to increase economic activity in the next two months.
Increased government spending on projects is expected to further increase economic activity as the economy recovers from the pandemic’s impact.
Additionally, 36% of respondents pointed out that economic activity would benefit from improved business confidence following the rollout of the COVID-19 vaccine. In comparison, 29% of respondents anticipated favourable weather and agricultural reforms to boost economic activity in the next two months.
The March 2021 Market Perceptions Survey says sustained optimism in the country’s economic prospects for the next 12 months is primarily attributed to the rollout of the COVID-19 vaccine.
The CBK expects improved economic activity in March and April as the economy recovers from the impact of the virus and containment measures. The CBK has revised financial growth expectations for 2021 relative to the previous survey, primarily due to the expected rebound in all sectors that had been affected by COVID -19 in 2020.
Expectations of an increase in private sector credit growth in 2021 by banks mainly due to pick-up in economic activity and inflation expectations remain anchored due to low food prices.