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Kenya Economic Update : Navigating the Pandemic (Inglês)

Kenya’s economy has been hit hard by COVID-19, severely affecting incomes and jobs. The economy has been exposed through the dampening effects on domestic activity of the containment measures and behavioral responses, and through trade and travel disruption (affecting key foreign currency earners such as tourism and cut flowers). Real Gross Domestic Product (GDP) contracted by 0.4 percent in H1 2020 year-on-year(y/y), compared to growth of 5.4 percent in H1 of 2019. This reflects a worse-than-anticipated Q2 GDP outturn, mainly due to a sharp reduction of services sector output, especially education. As a result, the economy is projected to contract by 1.0 percent in 2020 in the baseline scenario, and by 1.5 percent in a more adverse scenario. This revision essentially adopts the adverse scenario outlined in the April 2020 update, reflecting the more severe impact of the pandemic to date than had been initially anticipated, including on the measured output of the education sector following the closure of institutions in March. The special focus topic finds that the pandemic increased poverty by 4 percentage points (or an additional 2 million poor) through serious impacts on livelihoods, by sharp decreases in incomes and employment. The unemployment rate increased sharply,approximately doubling to 10.4 percent in the second quarter as measured by the KNBS Quarterly Labor Force Survey. Many wage workers who are still employed face reduced working hours, with average hours decreasing from 50 to 38 hours per week. Almost 1 in 3 household runbusinesses are not currently operating, and between February and June average revenue from household run businesses decreased by almost 50 percent. This has exacerbated food insecurity, and elevated pain and human suffering. In response to the crisis, the government has deployed both fiscal and monetary policies to support the healthcare system, protect the most vulnerable households, and support firms to help preserve jobs,incomes and the economy’s productive potential. Tax revenue dropped below target, due to the marked slowdown in economic activity, as well as tax relief as part of the government’s fiscal response package. At the same time, expenditures were raised to strengthen the capacity of the healthcare system to manage infections, protect the most vulnerable households, and support businesses.

Detalhes

  • Data do documento

    2020/11/24

  • TIpo de documento

    Report

  • No. do relatório

    154560

  • Nº do volume

    1

  • Total Volume(s)

    1

  • País

    Quênia,

  • Região

    Africa East,

  • Data de divulgação

    2020/11/25

  • Disclosure Status

    Disclosed

  • Nome do documento

    Kenya Economic Update : Navigating the Pandemic

  • Palavras-chave

    real gdp; national health insurance fund; Micro, Small and Medium Enterprise; vulnerable household; food transport; limited access to finance; healthcare system; cash reserve ratio; decline in tax revenue; access to external finance; real gross domestic product; better access to information; consumption of fixed capital; environment and social management; Poverty and Equity; average wage of worker; access to digital technology; private consumption; monetary policy; social protection program; sector output; fiscal consolidation; net export; information and communication; public debt burden; unemployment rate; national account; agriculture industry; place of residence; interest rate cap; regional economic growth; communicable disease outbreak; debt service relief; Cash Transfer; liquidity support; spread of infection; public investment portfolio; domestic economic impact; fiscal stimulus package; public investment spending; resource rich countries; education and health; change in remittance; division of revenue; withholding income tax; partial credit guarantee; errors and omission; private sector credit; international development finance; drag on growth; independent legal entity; income tax relief; increase in debt; access to health-care; lost jobs; public wage bill; global value chain; global capital market; Public Financial Management; fiscal policy response; value added tax; loss of life; private sector participant; medium term growth; energy and water; closure of institution; stringent social distance; trade finance facility; domestic revenue mobilization; extreme poverty line; human capital; fiscal space; policy option; electricity sale; Real estate; Fiscal policies; aggregate demand; in poverty; employment distribution; fiscal deficit; industrial activity; supply chain; learning activity; Health Service; guarantee scheme; private investment; sectoral employment; new cases; retail trade; education output; high frequency; food insecurity; insurance activity; Financial Sector; inclusive growth; pending bill; new credit; national accounting; lost income; Macroeconomic Stability; socioeconomic impact; transparent use; fiscal constraint; trained teacher; budget target; adequate resources; human suffering; vulnerable group; new poor; serious impacts; constant price; fiscal balance; external demand; fiscal response; percent change; transmission channel; wage worker; fiscal pressure; global economy; cumulative total; portfolio investment; agricultural output; education institution; financial soundness; informal sector; global growth; trade deficit; systemic risk; financial account; liquidity pressure; real value; prompt payment; new market; output gap; goods trade; upper bind; pandemic response; loan quality; lower demand; international school; Cash flow; economic hardship; school closure; rising unemployment; global trade; service contract; national border; food market; international flight; recent months; limited mobility; Food Services; financial crisis; consumer inflation; discretionary tax; consumer confidence; Health policies; oil exporter; social work; confirmed case; basic price; global commodity; trading partner; northern hemisphere; market price; low inflation; physical health; oil import; rural area; public finance; weighted average; vertical line; transit station; bus stop; Mental health; fiduciary arrangement; institutional framework; increased risks; as financial; financial system; interest cap; small borrower; adequate collateral; several constraints; adjustment package; Public Infrastructure; youth work; turnover rate; liquidity constraint; budget execution; procurement process; erp systems; electronic platform; procurement contract; work environment; wage distribution; medical supply; budget deficit; hospital infrastructure; high debt; resilient recovery; production network; panic attack; maize flour; food production; global demand; international transport; agriculture sector; output decline; value addition

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