Globally, most developed and developing economies are projected to experience improved growths in 2015. Subsequently, the world trade is expected to grow by 4.5 per cent compared to a growth of 3.0 per cent during the year. Oil prices are projected to remain subdued throughout the year due to possibilities of sustained oversupply as Iran and Libya add to the current output after improved political environment. Based on these projections, the global economic prospects for 2015 is therefore bright with world real GDP projected to grow at 3.5 per cent in 2015 subject to continued recovery from the global financial crisis. This is expected to impact positively to Kenya’s economic growth. The country experienced depressed rainfall during first quarter of 2015 while weather forecast points to a possibility of insufficient long rains in parts of the country. Performance of the agriculture sector is therefore likely to remain close to the 2014 level due to its over-reliance on rain fed water. On average, electricity prices might fall slightly in 2015 due to increased share of geothermal electricity generation.
Inflation is projected to ease in 2015 supported by lower prices of oil and electricity. Improved external environment and a sustained strong internal demand are likely to favour growths in many sectors of the economy this year. The ratio of current account to GDP is expected to remain close to the level of 2014. The Government fiscal policies in the 2015/16 national budget will focus on re-orientation of expenditure from recurrent to development while private sector investment is anticipated to remain vibrant. Other macroeconomic indicators are projected to remain stable and supportive of growth in 2015.
Economic Survey 2015
