Boston, MA -- (SBWIRE) -- 09/25/2012 -- Core Views: We believe that Kenyan economic activity will pick up over the course of 2012 as inflation falls and monetary policy is eased. We are forecasting full-year real GDP growth of 4.9%, up from an estimated 4.1% in 2011. Furthermore, we believe growth will accelerate further to 6.0% in 2013 as sentiment improves following the conclusion of elections early in the year. We maintain our view that monetary easing will begin around the middle of the year. We forecast 250 basis points of cuts to the benchmark interest rate during 2012, with the rate ending the year at 15.50%. While the High Court's ruling that elections will take place in March 2013, rather than August 2012, provides clarity on the timing of the vote, there is still a great deal of uncertainty surrounding the election. It is unclear whether two prominent politicians will be eligible to run because of ongoing proceedings at the International Criminal Court in The Hague. There is also likely to be a great deal of horsetrading, with alliances likely to be made and broken in the run-up to the election. Major Forecast Changes Upward revisions to BMI's oil price forecasts for 2012 and 2013 have led us to increase our expectations for Kenya's current account shortfalls in each year. We now see the deficit rising to US$4.5bn in 2012, up from an estimated US$4.0bn in 2011, before narrowing slightly to US$4.4bn in 2013. Key Risks To Outlook The weather poses risks to our views on growth, inflation, the currency and the balance of payments position. Another season of inadequate rain would undoubtedly have negative ramifications for all of these. Another major risk stems from elections. Although by no means our core scenario, we cannot rule out the possibility of a repeat of the unrest which followed the last poll in 2007, which would have negative implications for the economy. Our core scenario for Kenyan growth assumes a mild recession in Europe. If the situation ends up being far worse (eg, a breakup of the eurozone), Kenya would be negatively affected through its trade and financial links not only to Europe but also the rest of the world.
View Full Report Details and Table of Contents
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff will help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
Browse all Country Reports research reports at Fast Market Research
You may also be interested in these related reports:
- Philippines Business Forecast Report Q4 2012
- Bulgaria Business Forecast Report Q4 2012
- Switzerland Business Forecast Report Q4 2012
- Singapore Business Forecast Report Q4 2012
- Poland Business Forecast Report Q4 2012
- Malaysia Business Forecast Report Q4 2012
- Kazakhstan & Central Asia Business Forecast Report Q4 2012
- China Business Forecast Report Q4 2012
- Croatia Business Forecast Report Q4 2012
- Slovakia Business Forecast Report Q4 2012