Metropol forecasts Kenya's economy will grow 6.5% in 2019, citing capital investments in affordable housing, healthcare, food security, and manufacturing under the Big 4 agenda, according to managing director Sam Omukoko.
The report highlights mobile banking lending expansion as a key growth driver, with food inflation expected to ease amid favorable rainfall. Traditional sectors like horticulture exports are gaining traction alongside innovations such as KCB and CBA's M-Pesa-enabled Fuliza credit facility, projected to reach Kshs 100 billion in 2019.
Omukoko warned that unsustainable mobile lending practices could emerge if borrowers fail to manage credit responsibly. The firm anticipates a narrowing current account deficit through rising diaspora remittances, foreign direct investment, and subdued global petroleum prices.
Diaspora inflows are projected to surge to Kshs 274 billion in 2019 from Kshs 198 billion in 2017, supported by economic recovery in North America and Europe. A $2 billion Eurobond is planned for the first half of 2019 as the government continues domestic borrowing through treasury bills and infrastructure bonds.
Interest rates are expected to remain at 13% through 2019, with the 70% deposit rate abolished under the Finance Act 2019. The current account deficit is forecast to narrow marginally due to falling oil prices, now at $60 per barrel compared to $85 in October 2018, with oversupply expected to persist through 2019.
Inflation is likely to stay within the Central Bank of Kenya's 2.5-7.5% target as expenditure cuts continue. Metropol estimates real GDP growth will slightly outperform 2018's 6.5% mark, bolstered by mobile banking expansion and favorable weather for the 2019 long rains.
The report emphasizes that Kenya's economic trajectory remains heavily influenced by the government's Big 4 agenda projects, despite ongoing challenges in maintaining fiscal stability through the 2019/2020 budget cycle.
