The world bank projects that Kenya’s poverty rate will fall to 33.4 per cent in 2022, below the pre-crisis level of 34.4 per cent in 2019
The Washington based lender said with the GDP growth projected to average 5.2 per cent over the 2022-2024 window, growth in real per capita incomes will help reverse the rising poverty rates caused by the Covid-19 pandemic.
“Kenya’s economy was severely disrupted by the Covid-19 shock but it has staged a strong recovery, and the poverty rate is projected to fall below its pre-pandemic level in 2022,” the World Bank said in its latest outlook report.
Consequently, Kenya’s poverty rate is anticipated to dip to 32.5 per cent next year, a five year low and 31.6 per cent in 2024.
“The baseline projections assume that normal rains support good agricultural harvests to drive food processing, sustain export growth, help anchor inflation expectations, and support households’ consumption,” the World Bank.
While the pandemic stalled growth in 2020, the economy has recovered, and output is well above pre-pandemic levels.
The economy grew by an estimated 6.7 per cent in 2021, supported by a strong recovery of the services sector, particularly education, and growth in manufacturing and construction. Agricultural output, however, contracted by 1.5 per cent in 2021, due to below-average rains.
The disruption caused by the omicron variant of Covid-19 led to some moderation of economic activity in the fourth quarter of 2021.
However, the fiscal outturn in the first half of the fiscal year 2021/22 improved, driven largely by economic recovery, a strong rebound in revenues, and new tax policy and administration measures implemented under the government’s medium-term fiscal policy consolidation programme.