The Central Bank of Kenya Governor Dr Patrick Njoroge today addressed the press after the Monetary policy committee met on Tuesday, 29 September. Njoroge commences by noting that since the previous meeting in July, nations have come out of lockdowns although uncertainty still looms.
Despite the steep decline in economic activity during the second quarter (April-June) of 2020, there are signs of economic recovery. Global export orders and merchandize volumes have recovered strongly and also the purchasing manager index (PMI) has also improved in the north of 50 in many countries. Travel restrictions have also been lifted with international tourism arrivals resuming from an almost complete cessation in Q2.2020.
There has also been a strong recovery in remittances from developed economies since May. There are concerns about the resurgence of coronavirus infections in major economies such as the UK, US, Spain.
On the domestic front, Njoroge says that Kenya’s economy is in a transition towards post-COVID. Inflation remains subdued as it has been in the last few months. Food is plentiful due to ample rainfall and high crop production such as maize quelling earlier fears of food shortage due to locust invasion. The governor expects increased production for potatoes, beans, tea, and cane saying that agriculture is forecast to grow around 6% in 2020.
Mining and quarrying forecast to grow by 9.6 per cent buoyed by stable cement production and consumption, significant improvement in production and export of base titanium.