This archive report was first published on 27 June 2020.
Kenya's economy has been showing signs of recovery since May, with increased exports in tea, flowers, and vegetables helping to offset the adverse effects of the COVID-19 pandemic.
According to Central Bank of Kenya Governor Patrick Njoroge, the country's economic indicators have reversed expectations of a further decline in GDP, despite the ongoing disruption to normal business operations.
“By all indications, May saw the economy bouncing back, and the expectation that we would sink further has not been borne out by reality or numbers,” Njoroge said during a post-MPC media briefing.
While the Monetary Policy Committee (MPC) maintained its growth forecast for the year at 2.3 percent, it noted an increase in diaspora remittances sent home in May, with Kenyans in South Africa sending Sh24.4 billion, up from Sh22.1 billion in April.
However, Governor Njoroge warned that the outlook remains uncertain, and that the pandemic needs to be controlled before the economy can reopen.
“We don't want to be foolish and say that the worst is behind us. We need to be cautious, and at the end of the day, it's not GDP that matters, but the lives of people, and that's what we should be focused on,” he added.
As part of efforts to mitigate the impact of the pandemic, banks have restructured loans worth Sh680 billion, equivalent to 23.4 percent of the total banking sector loan book of Sh2.9 trillion.
The MPC maintained its benchmark lending rate at 7.00 percent, citing the effectiveness of policy measures adopted since the outbreak of the pandemic.
