Republic of Kenya

Abstract

Kenya is facing a pronounced economic slowdown and an urgent balance of payments need owing to the COVID-19 pandemic. Kenya’s economy was performing well prior to the global shock with accelerating growth, contained inflation and current account deficits, and a resumption of fiscal adjustment to tackle rising public debt vulnerabilities. The COVID-19 pandemic is expected to significantly reduce growth in 2020, with a large impact on agricultural exports, services, remittances, and the financial account thus weakening the external position. The authorities are taking measures to combat the spread of the virus and mitigate its adverse effects on the economy and vulnerable segments of the population. Staff expects that additional spending and lower revenue collection would entail a pause in fiscal consolidation.