Economy rebounds on exports

Kenya's economy is expected to rebound in the last quarter of 2020 on the back of increased export of horticultural products, fruits and tea.

The horticultural industry was losing at least Sh106 million per day as a direct impact of the Covid-19 pandemic three months ago but is slowly recovering after the European markets eased on Covid-19 restrictions.

According to a report released in London by Scope Markets, Kenya's Gross Domestic Product (GDP) is set to grow by 1.5 per cent in 2020 against an earlier forecast of a contraction.

The European market accounts for nearly 70 per cent of Kenya’s cut flower exports but coronavirus restrictions had slashed daily orders by half.

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Scope Market analysts said the rebound is driven by improved agricultural yields because of good rains and improved market conditions following a relaxation of the strict Covid- 19 restrictions.

The analysts noted that some sectors such as delivery of services or grocery stores, have seized growth opportunities presented by the pandemic, witnessing some growth.

While the positive signs of recovery are visible, the budget funding is a cause of concern for the Kenyan economy. The budget gap is seen at Sh840.6 billion in the current fiscal year or 7.5 per cent of the Gross Domestic Product.

Kenya, however, declined the G-20’s offer on debt relief because it would have a negative impact on existing commercial lending terms.

Kenya is said to be in talks with the World Bank for a loan to provide further budget support after receiving $1 billion in May.